A cash flow statement is a financial statement<\/a> that provides a summary of how a company manages its cash position over a specific period of time. It shows the inflows and outflows of cash and cash equivalents, categorising them into operating, investing, and financing activities.\u00a0<\/span><\/p>\n The primary purpose of a cash flow statement is to provide a detailed account of how changes in a company’s balance sheet<\/a> and income statement<\/a> affect its cash and cash equivalents. It helps stakeholders, including investors, creditors, and management, understand how the company generates and uses cash.<\/span><\/p>\n There are three main categories:<\/span><\/p>\n The cash flow statement is a vital analytical tool for financial analysts, as it helps in evaluating the quality of a company’s earnings and its capacity to generate sustainable cash flows, and it provides insights into a company’s ability to withstand economic downturns or unforeseen financial challenges by showing its liquidity<\/a> and cash flow management.<\/span><\/p>\n This simplified cash flow statement demonstrates how cash is generated and used by a company in its activities during a specific period.<\/p>\n","protected":false},"author":1,"template":"","class_list":["post-28528","business-glossary","type-business-glossary","status-publish","hentry"],"acf":[],"featured_image_urls_v2":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":"","image_blog":"","image_podcast":"","image_banking":"","image_blog_internal":"","image_blog_medium":"","image_single_banking":""},"post_excerpt_stackable_v2":" Definition\u00a0 A cash flow statement is a financial statement that provides a summary of how a company manages its cash position over a specific period of time. It shows the inflows and outflows of cash and cash equivalents, categorising them into operating, investing, and financing activities.\u00a0 What is a cash flow statement? The primary purpose of a cash flow statement is to provide a detailed account of how changes in a company’s balance sheet and income statement affect its cash and cash equivalents. It helps stakeholders, including investors, creditors, and management, understand how the company generates and uses cash. There…<\/p>\n","category_list_v2":"","author_info_v2":{"name":"root","url":"https:\/\/swoopfunding.com\/ca\/author\/root\/"},"comments_num_v2":"0 comments","_links":{"self":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/business-glossary\/28528","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/business-glossary"}],"about":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/types\/business-glossary"}],"author":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"version-history":[{"count":1,"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/business-glossary\/28528\/revisions"}],"predecessor-version":[{"id":34547,"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/business-glossary\/28528\/revisions\/34547"}],"wp:attachment":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/media?parent=28528"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}What is a cash flow statement?<\/h3>\n
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Example of cash flow statement<\/h4>\n\n\n
Inflows<\/strong>:
Software licensing fees:
Sale of equipment:
Issuance of new shares:
Outflows<\/strong>:
Payments to suppliers and expenses:
Employee salaries:
Utilities and rent;
Investment in R&D project:
Purchase of computer servers:
Repayment of loan:
Payment of dividends:<\/td>
$500,000____<\/span>
$30,000
$150,000
$270,000
$50,000
$20,000
$100,000
$40,000
$50,000
$30,000<\/td><\/tr>Net increase in cash:<\/td> $190,000<\/td><\/tr> Beginning cash balance:<\/td> $300,000<\/td><\/tr> Ending cash balance:<\/td> $490,000<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n