What is the cash flow statement?

The cash flow statement tracks the flow of cash in and out of a business over a specific period. The following categories are available in the cash flow statement:

1. Cash balances: the total cash balance at the beginning (BOP) and end of a period (EOP).
2. Net total cash flow: the total cash flow for the period, including optional breakdowns of inflows and outflows
3. Net operating cash flow: the total cash flow from all operational business activities, reflecting how much cash is generated from the company’s products or services. Optional breakdown into in- and outflows as well as more granular categories.
4. Net financing and investing cash flow: total cash flow from all financing and investing activities, reflecting any sources and uses of cash from non-operational activities such as debt or equity financing transactions. Optional breakdown into in- and outflows.
5. Net intracompany cash flow: total cash flow between the accounts of the company or between accounts of subsidiaries. Optional breakdown into in- and outflows.

The statement is important because it helps you understand if your company has enough cash to cover its bills and grow. It's a crucial tool for assessing liquidity and financial health. The cash flow statement can be adjusted by changing the classification for the transactions on the data page.

What does it tell me about my company?

The cash flow statement provides insights into your company’s financial health by showing how cash is generated and spent over a specific period. Here’s what it can tell you:

1. Liquidity status: it reveals whether your company has enough cash to meet its short-term obligations. Positive cash flow means your company can cover expenses, while negative cash flow might signal liquidity problems.
2. Operational efficiency: it shows how much cash is generated from core business activities. A strong cash flow from operations indicates your business is generating sufficient funds to support day-to-day activities.
3. Investment health: the investing activities section tells you how much cash is being spent on acquiring or selling assets. Excessive spending on investments without returns could indicate potential financial strain.
4. Debt and equity management: it reflects how cash is used for debt repayments or equity transactions. This helps you assess whether your financing activities are healthy or placing a burden on your business.
5. Cash flow trends: it provides insight into whether your cash position is improving or deteriorating over time, helping you forecast future cash needs and make better financial decisions.
6. Financial strategy effectiveness: it shows how well your financial strategies, such as cost management, investment planning, and fundraising, are working in practice.

What are the underlying data sources?

The cash flow statement is based on cash transactions. It will not necessarily be identical to the accounting statements which have to follow local accounting standards. However, this gives you the advantage of real-time access to transactions and not a month in delay.