A cash flow statement is one of the four main financial statements for a company, along with the balance sheet, income statement, and statement of shareholders’ equity.
It is a record of the amount of cash and cash equivalents that flow in and out of a company for a specific time.
Cash includes currency, checks on hand, and deposits in the bank. Cash equivalents are short-term, temporary investments, such as Treasury bills, CDs, or commercial paper.
Cash is the lifeblood of the business. This statement helps you understand where money is coming from and where it is being spent.
The cash flow statement is made up of three components: operating activities, investing activities, and financing activities.