Statement of cash flows

Definition

The Statement of Cash Flows is a financial report that details how a company's cash position changes over a period due to its operating, investing, and financing activities. It provides insights into the company's liquidity and its ability to cover expenses and debts.

Related terms

Operating Activities: These involve the primary revenue-generating activities of an entity, such as sales and service provision, essentially showing cash inflow or outflow from regular business operations.

Investing Activities: This part reveals cash spent on or generated from long-term assets, like purchasing equipment or selling off investments, indicating how cash is reinvested in or garnered from such assets.

Financing Activities: These transactions involve changes in equity and borrowings of the company, including issuing shares or obtaining loans, representing cash flow between the company and its financiers