Financial StatementsBeginner
Cash Flow Statement
The report showing actual cash coming in and going out, split into operating, investing and financing.
Detailed explanation
Operating cash flow comes from the core business, investing covers capex and acquisitions, and financing covers borrowing, repayments and dividends. Profit can be high while cash is weak, and this statement reveals that.
Why it matters
Cash pays salaries and lenders; accounting profit does not.
Key points
- Three sections: operating, investing, financing.
- Compare operating cash flow with PAT.
- Basis for free cash flow.
Related terms
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Educational content only. Definitions and examples are illustrative and are not investment, tax or legal advice.