Cash flow statement interpretation involves analyzing a company’s cash inflows and outflows in order to gain insights into its financial health. The cash flow statement helps investors, creditors, and other stakeholders to assess the liquidity, solvency, and financial flexibility of a business. It can also be used to decipher the effects of certain strategic decisions on the overall financial position of a company. Essentially, interpretation of a cash flow statement is about understanding how cash moves within an organization and which activities or investments generate cash or consume it.