A company’s cash flow statement records the movement of cash over a period of time. Along with the balance sheet and income statement, the cash flow statement is a required element of a company’s financial reports. The report allows for management and investors to see how a company’s operations are running, where the money is coming from and how it is being spent.
All cash transactions affect the cash flow statement in some way or another. Money that goes out like paying for salaries, equipment, loan, etc. lowers the cash. Money that comes in such as receiving customer wire transfers, interest income, stock purchases, etc. increases cash.