The Cash Flow Statement is an important statement to any business, providing information about cash in and out of the company. It breaks down into three sections, designed to give a thorough understanding of incoming and outgoing funds.
The Operating Activities section shows all money related to running the business operations. This may include sales, wages, loan payments or other day-to-day costs. The Investing Activities section covers any money spent on long-term investments such as buying property or equipment. Finally, the Financing Activities section details activities related to acquiring financing from investors or other lenders. All of these sections should be studied when making financial decisions, as they provide an in-depth picture of a company’s financial health.