A cash flow statement is an obligatory aspect of a company’s financial reporting, along with the balance sheet and the profit and loss statement. It indicates the amount of cash or cash equivalents entering and leaving the business over a specified period. The cash flow statement definition does not include net income. Rather, it simply tracks the transfer of cash through a company’s core operations, investing and financing practices.
What is a statement of cash flow for investors? Aside from being a standard measure of reporting every business must conform to, it is a useful analytical tool for investors to understand the financials of a company of interest.