Cash Flow Statement
A report showing how cash moves in and out of a business across operating, investing, and financing activities.
The cash flow statement tracks the actual movement of cash during a period, categorised into three sections: operating activities (cash from core business), investing activities (capital expenditures, acquisitions), and financing activities (debt, equity, dividends).
While a P&L can show profit even when cash is tight — due to accrual accounting, receivables, and non-cash charges — the cash flow statement reveals the real liquidity picture. A profitable company with negative operating cash flow has a working capital problem.
For startups and growth-stage companies, the operating cash flow section is critical because it determines burn rate and runway. For mature businesses, free cash flow (operating cash flow minus capital expenditure) is the metric most closely watched by investors.
The cash flow statement is also essential for forecasting. Building a reliable cash flow forecast helps businesses avoid the single most common cause of failure: running out of cash.
Related Terms
A financial report summarising revenue, costs, and profit over a specific period.
The rate at which a company spends cash each month — critical for startups tracking their runway.
The number of months a company can continue operating at its current burn rate before running out of cash.
Current assets minus current liabilities — a measure of short-term liquidity and operational efficiency.
Further Reading
Revenue looks good but cash is always tight? Learn why Malaysian SMEs face cash flow problems and 5 proven strategies to fix them for good.
Learn how to build a credible, board-ready cash flow forecast — from model structure to the assumptions that determine whether your numbers hold up.
A practical guide to the financial KPIs that give CFOs real-time visibility into business health across global operations.