• The cash flow statement shows the flow of cash and cash equivalents during the financial period.
• The cash flow statement depicts sources of cash inflows and transactions of cash outflows during a period. It is a statement indicating the flow of cash and cash equivalents during a period.
• Statement of cash flows reports of a company shows cash flow activities, particularly operating investing, and financing activities.

The cash flow statement shows cash flows (inflow and outflow) in terms of three components as per accounting standard

(i) operating, (ii) investing, and (iii) financing activities.

• The cash flow statement shows the net increase/ decrease of cash and cash equivalents under each activity individually and collectively. Cash flows from operating activities result from the major revenues producing activities of a business concern.
• The major operating items are cash inflow (cash sales), cash received from debtors, cash proceeds from extraordinary items, royalty, commission, etc.), and cash outflow (cash purchases, cash paid to suppliers and employees, and cash operating expenses, income tax, etc.)