The Cash Flow Statement is a summary of inflow or outflow of company's money. It is a standard financial statement, that comes with a balance sheet and income statement. It breaks the cash flow into three categories: Operating, Investing, and Financing activities. These categories can be described as below :
The cash flow statement organizes and reports the cash generated and used in the following categories:
It converts the items reported on the income statement from the accrual basis of accounting to cash.
It reports the purchase and sale of long-term investments and property, plant and equipment.
It is used for issuance and repurchase of the company's own bonds & stock and the payment of dividends.
This information is used to report the exchange of significant items that did not involve cash and reports, the amount of income taxes paid and interest paid.