What is the cash flow statement?

Definition of cash flow statement

The cash flow statement details all cash movements over a given financial year, distinguishing between cash flows from operating, investing and financing processes.

The cash flow statement forms part of the company's financial statements, together with the income statement, balance sheet and notes.

Example of a projected cash flow statement

Here is an example of a projected cash flow statement from our business planning application.

Cash Flow statement Analysis

The cash flow statement is the most important financial statement as it provides a quick overview of the following items:

• the cash generated by the company's operations
• the amount of investments made
• flows linked to the financing of the company (loans, share issues, dividends)
• the company's cash position

The information provided by the cash flow statement can be supplemented with the other financial statements.

Here are a couple examples of interesting ratios:

• Net operating cash flow / EBITDA: measures the company's ability to turn its operating income into cash
• Investments (net) / Turnover: measures the share of revenues spent on investments