Financial statement that shows the cash inflows and outflows of a company over a specific period. Cash is the liquidity, i.e., the availability of liquid means in a company’s cash box or bank account. The document integrates the sources of financing, which are the contribution of money to develop a project or company (e.g., retained cash flow and new bank or supplier loans), and their application (in cash, investments, increases in working capital, or dividends, among others). The cash flow is the cash flow that enters or leaves a company or is associated with an investment project of the same; the amount is obtained by adding the depreciations made in that period to the net profit obtained in the same period. A bank loan is a disposition of funds that a bank agrees to give in exchange for interest calculated on the amount actually disbursed. Working capital is the portion of the circulating asset financed by long-term resources that corresponds to the difference between the circulating asset and the circulating liabilities; it serves to ensure normal payment to suppliers and creditors by converting customer balances and inventory into cash during a production cycle. In the statement of cash flows, applications, investments, and permanent resources obtained on the one hand, and active and passive variations of the circulating assets on the other hand are analyzed.
« Back to Glossary IndexStatement of cash flows
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