Purpose of the Statement of Cash Flows
Objectives of Cash Flow Reporting
The Statement of Cash Flows provides information about cash generated and used during a reporting period. It helps users understand a company's ability to generate future cash flows, meet financial obligations, pay dividends, and finance growth.
Note
The statement of cash flows complements the balance sheet and income statement by explaining changes in cash.
Summary
Cash flow reporting helps stakeholders evaluate a company's cash-generating ability and financial flexibility.