What is Cash Flow Statement?

The cash flow statement reports the actual cash entering and leaving a business over a period, split into operating, investing and financing activities.

Operating cash flow shows cash generated by the core business. Investing cash flow tracks capex, acquisitions and asset disposals. Financing cash flow captures debt, equity issuance, dividends and buybacks.

The statement reconciles the change in cash on the balance sheet between two dates, exposing the gap between profit and cash. Sustainable businesses generate enough operating cash flow to fund capex, service debt and reward shareholders.

Example

A startup reports CHF 100k operating cash inflow, CHF 200k investing outflow (new equipment) and CHF 300k financing inflow (Series A) — net cash position rises by CHF 200k.

Related terms

Cash Flow

Cash flow is the net amount of cash moving into and out of a business during a period, measuring the actual liquidity created or consumed rather than accounting profit.

Free Cash Flow

Free cash flow (FCF) is the cash a business generates from operations after deducting the capital expenditures needed to maintain or expand its asset base — the cash truly available to shareholders, lenders and reinvestment.

Balance Sheet

The balance sheet is a financial statement that shows a company's assets, liabilities and shareholders' equity at a single point in time, governed by the accounting equation Assets = Liabilities + Equity.

Income Statement

The income statement (or profit and loss statement, P&L) reports a company's revenues, expenses and profits over a specific period, showing whether the business made money and how.

Frequently asked questions

Why have a cash flow statement?+

Because accrual profit can hide cash strain. Cash flow shows what actually moved through the bank account.

Direct vs indirect method?+

Direct lists actual cash receipts and payments; indirect starts with net income and adjusts for non-cash items. Most companies use indirect.

What does positive operating cash flow mean?+

The core business generates more cash than it consumes — the foundation of self-funding growth.