Fundamental Glossary / Financial Statements
Cash Flow Statement
The bridge from profit to the change in cash, split into operating, investing, and financing cash flows.
Formula
Opening cash + operating cash flow + investing cash flow + financing cash flow = closing cash.
What it means
Profit is an opinion built from accruals. The cash flow statement shows the cash that actually moved.
The three sections answer three questions: did the business produce cash, what did it buy or sell, and how did it fund itself.
How to read it
A healthy pattern for a mature firm is positive operating cash flow, negative investing cash flow from reinvestment, and financing cash flow that pays dividends or reduces debt.
What to watch
Cash interest and cash tax classifications differ between accounting standards. Compare years on one standard. Also separate a one-time asset sale from cash earned by selling the product.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.