- Where the money came (will come) from?
- Where it went (will go)?
- Operating-activities (sales of goods or services),
- Investing-activities (sale or purchase of an asset, for example), and
- Financing-activities (borrowings, or sale of common stock, for example).
Together, these sections show the overall (net) change in the firm's cash-flow for the period the statement is prepared.
Lenders and potential investors closely examine the cash flow resulting from the operating activities. This section represents after-tax net income plus depreciation and amortization and, therefore, the ability of the firm to service its debt and pay dividends.
Use cash flow statement in a sentence
Being able to prepare a good cash flow statement will make it much easier for you to break down your yearly finances.
Our business would require a cash flow statement, so we could see how we were doing with our investing and financing activities.
Being able to properly read your cash flow statement lets you know how your business is running at the moment.