Cash Flow Statement
A cash flow statement is a financial statement that provides a summary of the cash inflows and outflows of a business over a given period of time. It is used to assess the liquidity of a business, as well as its ability to generate cash to pay its bills and other obligations. The cash flow statement is one of the three primary financial statements used to assess the financial health of a business, along with the balance sheet and income statement.
History of the Cash Flow Statement
The cash flow statement was first introduced in the 1970s as part of the Generally Accepted Accounting Principles (GAAP). It was designed to provide a more comprehensive view of a company’s financial health than the balance sheet and income statement. The cash flow statement is now a required part of financial statements for publicly traded companies.
Comparison of Cash Flow Statement to Other Financial Statements
| Statement | Purpose | Time Frame |
|---|---|---|
| Cash Flow Statement | Tracks cash inflows and outflows | Specific period of time |
| Balance Sheet | Shows assets, liabilities, and equity | Specific date |
| Income Statement | Shows revenue and expenses | Specific period of time |
Summary
The cash flow statement is an important financial statement that provides a summary of the cash inflows and outflows of a business over a given period of time. It is used to assess the liquidity of a business, as well as its ability to generate cash to pay its bills and other obligations. For more information about the cash flow statement, visit the websites of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB).
See Also
- Balance Sheet
- Income Statement
- Cash Flow Analysis
- Cash Flow Forecasting
- Cash Flow Budgeting
- Cash Flow Management
- Cash Flow Ratios
- Cash Flow Statement of Changes in Financial Position
- Cash Flow Statement of Sources and Uses of Funds
- Cash Flow Statement of Cash Flows
