What is a cash flow statement?

A cash flow statement is a financial report that shows where your money is coming from and where it’s going. It’s also known as a ‘statement of cash flows’ or a ‘CFS’.

At first glance, a cash flow statement looks similar to an income statement. But cash is different to income – cash only includes spendable money. Income includes fixed term assets, long term assets and sales made on credit.

Cash flow statements show whether you’re able to cover short term expenses like bills and staff wages. It is also useful for investors, as it shows how well your business can bring in money.

 

Related terms:
What is the objective of financial reporting?
What is cash flow management?

Related Xero feature:
Know your numbers with the online accounting dashboard

Related Small Business Guide:
How to manage your finances and cash flow

Accounting Terms

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What is a cash flow statement?

A cash flow statement is a financial report that shows where your money is coming from and where it’s going. It’s also known as a ‘statement of cash flows’ or a ‘CFS’.

At first glance, a cash flow statement looks similar to an income statement. But cash is different to income – cash only includes spendable money. Income includes fixed term assets, long term assets and sales made on credit.

Cash flow statements show whether you’re able to cover short term expenses like bills and staff wages. It is also useful for investors, as it shows how well your business can bring in money.

 

Related terms:
What is the objective of financial reporting?
What is cash flow management?

Related Xero feature:
Know your numbers with the online accounting dashboard

Related Small Business Guide:
How to manage your finances and cash flow

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