Statement of Cash Flows (CF)

Statement of Cash Flows (CF)

What is the Statement of Cash Flows?

To properly track the finances for a business, it's important to understand the three common financial statements - the Balance Sheet, the Statement of Cash Flows, and the Income Statement. These financial statements relate to each other and can help investors paint a holistic financial picture of their profitability.

The Statement of Cash Flows, also referred to as the Cash Flow (CF) Statement, highlights a business' cash inflows and outflows. All cash should be represented on this financial statement including cash from

  • Operating Activities - Changes in cash that comes from the normal course of business operations (eg. Rent collected, Depreciation, etc.)
  • Investing Activities - Changes in cash that comes from investments in CapEx (eg. Upgrades to the property)
  • Financing Activities - Changes in cash that comes from investors, lenders, and owners (eg. Paid in Capital, Loans)

\[ Starting \, balance + \, Operating \, CF + Investing \, CF + Financing \, CF = Ending \, balance \]

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