 A cash flow statement, also known as the statement of cash flow is a financial report depicting amount of incoming and outgoing money during a particular time period. The statement does not include non-cash items like depreciation, thus making it useful for determining the short-term ability of a company to meet its liabilities.
It summarizes the company's cash receipts and cash disbursements over a period of time. It also lists cash to and cash from operating, investing, and financing activities, and also the net increase or decrease in cash for a particular period.
A cash flow statement collects, organizes and reports the cash generated and used in the following categories:
- Operating activities
- Investing activities
- Financing activities
- Supplemental information
Benefits of a Cash Flow Statement
- Helps the company to know whether it will be able to cover payroll and other immediate expenses
- Helps the lenders to know the company's ability to repay
- Helps the investors judge whether the company is financially sound
- Helps the newly formed companies to know their inflow and outflow of cash and thus prevent cash shortage
- We provides Cash Flow statements on monthly, quarterly, six monthly or yearly bases
- Cash flow statement records the inflow and outflow of cash over a period of time
- Helps the company to know whether it will be able to cover payroll and other immediate expenses
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