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Cash Flow Statement

A cash flow statement is one of the three primary financial statements, reporting the actual cash generated and spent by a business during a specific period across three categories: operating activities, investing activities, and financing activities. It reconciles the difference between accrual-based profit and actual cash movement, revealing whether the business generates enough cash from operations to fund its activities or relies on external financing. The cash flow statement is required under both IFRS and US GAAP.

Why This Matters

The cash flow statement is the reality check on the income statement. For mid-market companies, where credit lines are finite and cash reserves are thinner than in large corporates, understanding the sources and uses of cash is not optional. It reveals whether operational profitability actually converts into cash, whether growth is self-funding or draining liquidity, and whether the business is building or consuming financial resilience.

Where This Fits

This term sits within the Reporting Infrastructure area of Performance & Control.

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