Cash Flow Statement

The Cash Flow Statement tracks the movement of cash into and out of the company. It's crucial because profits on the Income Statement can be misleading; this statement shows the actual cash being generated.

Key Sections Explained

• Net Cash From Operating Activities: Cash generated by the company's regular business operations. This is a vital sign of a healthy company.
• Net Cash Used In Investing Activities: Cash used for investments, such as buying new equipment (Capital Expenditures) or acquiring other companies.
• Net Cash Used In Financing Activities: Cash flow between the company and its owners/creditors, such as issuing debt or repurchasing its own stock.
• Free Cash Flow (FCF): Calculated as Operating Cash Flow - Capital Expenditures. This is the cash left over after a company pays for its operating expenses and capital expenditures, which it can use to pay dividends, pay down debt, or expand the business.