Cash Flow Statement
Definition
A financial statement showing all cash inflows and outflows over a period, divided into operating, investing, and financing activities.
Explanation
The cash flow statement is the hardest financial statement to manipulate because cash is objective — either the money came in or it didn't. Operating cash flow shows cash generated from the business. Investing cash flow shows capex and acquisitions. Financing cash flow shows debt issuance, buybacks, and dividends. A healthy company generates positive operating cash flow that exceeds its capex (positive free cash flow). Persistent negative operating cash flow is a red flag even for growing companies.
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