Cash Flow Statement

The Cash Flow Statement shows how successful cash is managed within a business. It tracks how much cash is received and paid out for the particular period of the statement. It is important to understand that the Cash Flow Statement reflects only the movement of cash and shows the cash amounts that have moved up (increased) or down (decreased).

Depends on the Cash Flow item tracked showing a upwards/increase or downwards/decrease movement, can the Cash Flow value be positive if cash is increased or negative if cash is decreased.

The Cash Flow Statement usually shows the tracking of cash movement in three distinct sections:

  • Operating Cash Flow (Operational Cash Flow)
  • Cash Flow before Financing 
  • Cash Flow from Financing

A business with a positive overall cashflow (OCM) is a healthy business.


In the Book “What the Numbers Mean“, Renier provides a detailed overview of the three financial statements that makes up the set of business accounts. With the Income Statement, The Balance Sheet and Cash Flow Statement you have a full picture of the financial performance and well being of an organisation. The Income Statement (P&L) shows you the profit within an accounting period but profit is not cash and profit does not pay debt only cash does. The Balance Sheet shows you the activities linked to asset investment but does not show how cash rich a business is. The Cash Flow statement is key in linking up the P&L and Balance Sheet from a cash perspective. Cash is the hard currency of business – Cash is King!


You can obtain a copy of the book “What the Numbers Mean” from LeanPub here…



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