Understanding A Cash Flow Statement

Companies with stocks that trade on public exchanges are required to periodically disclose a wide range of documents with detailed information about their operations. The cash flow statement is one of the most important to understand.

What is a cash flow statement?

Cash flow statements are financial accounting statements that provide a detailed picture of the movement of money through a company — both what comes in and what goes out — during a certain period of time.

Using the information contained in a cash flow statement, business owners, shareholders, and potential investors can see how much cash a business is bringing and how much it's spending in a given period. In conjunction with other documents, cash flow statements can help you understand how financially healthy a company is.