Cash flow statement

It breaks down activity into three sections: operating, investing, and financing. Operating activity covers cash from running the business, including customer payments, supplier costs, and payroll. Investing activity tracks buying or selling equipment, property, and other long-term assets. Financing activity records loans received or repaid, plus owner contributions and draws.

The statement ties beginning cash to ending cash for the period. It shows timing details that profit on the P&L does not show. Unlike a forecast, which looks ahead, this statement looks back. Lenders often ask for one when evaluating your business.