What is a cash flow statement?

What is a cash flow statement?

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A cash flow statement, as the name suggests is a report informing how the cash has moved in and out of the business for a particular period.

It records the cash activity of a business, where the focus is on finding out where the cash is going, and where is it coming from.

One shouldn't confuse it with an income statement, which reflects the revenue and expenses of a business, and the exchange of cash isn't the focus. Rather, the cash flow statement deals solely with the actual cash transactions.

Why is it necessary to make cash flow statements? It's a crucial tool to understand liquidity of your business - whether it can meet short-term financial obligations or not!

Besides, understanding what cash flow is, and how it works for your business is a necessary business management skill.

Not only do you gain insights on money, but also be agile enough to grab new opportunities, when they come up.

Here are three key reasons why getting a CPA in Surrey for cash flow statement becomes particularly insightful in March:

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- Last updated at 05:29 14-03-2024

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