The cash flow statement is one of the four main financial statements of a organisation and is used to determine the short-term sustainability of the company. If cash is increasing (and operational cash flow is positive), then a n organisation will often be deemed to be healthy in the short-term. Increasing or stable cash balances suggest that the organisation is able to meet its cash needs and remain solvent. This information cannot always be seen in the income statement or the balance sheet of a company.

The cash flow statement breaks the sources of cash generation into three sections: operational cash flows, investing and financing. This breakdown allows the user of financial statements to determine where the company is deriving its cash for operations.

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