Cash Flow Statement
 |
Definition of 'Cash Flow Statement'One of the quarterly financial reports any publicly traded company is required to disclose to the SEC and the public. The document provides aggregate data regarding all cash inflows a company receives from both its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given quarter. |
 |
Investopedia explains 'Cash Flow Statement'Because public companies tend to use accrual accounting, the income statements they release each quarter may not necessarily reflect changes in their cash positions. For example, if a company lands a major contract, this contract would be recognized as revenue (and therefore income), but the company may not yet actually receive the cash from the contract until a later date. While the company may be earning a profit in the eyes of accountants (and paying income taxes on it), the company may, during the quarter, actually end up with less cash than when it started the quarter. Even profitable companies can fail to adequately manage their cash flow, which is why the cash flow statement is important: it helps investors see if a company is having trouble with cash. |
Related Definitions
Articles Of Interest
-
Analyze Cash Flow The Easy Way
Find out how to analyze the way a company spends its money to determine whether there will be any money left for investors. -
12 Things You Need To Know About Financial Statements
Discover how to keep score of companies to increase your chances of choosing a winner. -
Operating Cash Flow: Better Than Net Income?
Differences between accrual accounting and cash flows show why net income is easier to manipulate. -
What Is A Cash Flow Statement?
Learn how the CFS relates to the balance sheet and income statement as a part of a company's financial reports. -
Free Cash Flow: Free, But Not Always Easy
Free cash flow is a great gauge of corporate health, but it's not immune to accounting trickery. -
How To Efficiently Read An Annual Report
Learn how to read between the lines and decipher the actual condition of a company. -
Navigating Government And Nonprofit Financial Statements
Learn how to trace where your tax dollars and charitable donations are going. -
Is it possible for a company to have a positive cash flow and a negative net income?
This situation may seem a bit counter-intuitive at first, but it is actually quite common and not too difficult to understand. Let's break down the factors at play to examine more closely how ... -
What is the difference between a compiled and a certified financial statement?
All publicly-traded companies are required to provide financial statements, including a balance sheet, cash flow statement and income statement. To ensure that these statements are accurate and ... -
Introduction To Fundamental Analysis
Learn this easy-to-understand technique of analyzing a company's financial statements and reports.
Free Annual Reports