What Is The Statement Of Cash Flows?

Think of cash as the lifeblood of every business. Without cash flow, no business can function - and without an accurate picture of cash flow, no investor can have a complete picture of a company. A company's statement of cash flows reflects how readily the business can pay its bills, and it provides important information about a company's sources and uses of cash. But measuring cash flow solely from a balance sheet or an income statement is difficult and potentially misleading. That's because not all revenue is received when a company earns it, and not all expenses are paid when incurred.