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A statement of cash flow is a financial document used in conjunction with balance sheets and income statements. Companies will use these documents to create a complete financial report. The statement of cash flow will be used to demonstrate the cash generated by the company within a certain time frame. This information will be used by investors and shareholders to determine the company’s profit margin and risk.
Cash flow comes from several different areas of income. Operating activities such as sales are typically the majority. The cash flow statement should also include income from investments, stocks, bond, dividends, and other activities. This information allows important parties such as investors, shareholders, and employees to see how well the company is performing. This allows them to make informed choices regarding stocks and investments.
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