Cash flow statements report a company’s inflows and outflows of cash. This is important because a company needs to have enough cash on hand to pay its expenses and purchase assets. While an income statement can tell you whether a company made a profit, a cash flow statement can tell you whether the company generated cash. Having your Cash Flow Statements prepared regularly help:
• Determine whether the company generated cash flow
• Show changes over time rather than absolute dollar amount at point time
• Reorder the information from a company’s Balance sheets and income Statements.