The Story of the Cash Flow Statement

As a Non-Finance manager there are 3 main things you can look for when looking at a Cash Flow Statement ;

The problem is most don’t know where to look and what is what or even what the purpose of a Balance sheet is.

Not being Accounting literate can be daunting and overwhelming.

Let’s take a few steps back:

The Cash Flow Statement is 1 of the 3 financial reports that tells us the story of the financial performance of a business
The Cash flow statement shows the cash movement over 12 months
The Cash flow statement summarises how much money it made & where it was spent & what is left
The Cash Flow Statement shows the money made from its normal operations in buying and selling goods and services and paying for the costs of running the business
The Cash Flow Statement shows the money invested in property, plant and equipment to maintain and expand the business
The Cash Flow Statement shows the money it received from and invested in outside funding
As cash is king it tells us how favourable its cash position is

I love explaining it this way to get non-Finance people to broaden their thinking when reading & interpreting financial information.

Join our 1 day Accounting Made Easy course to become Accounting literate.