The cash flow statement is divided into three sections: cash flow from operations, cash flow from investing, and cash flow from financing.
- Cash flow from operations shows how much cash the company makes from its regular business activities. This part is crucial because it tells us whether the company’s operations are actually generating cash, not just profits on paper.
- Cash flow from investing shows the cash that the company uses to invest in things like equipment, machinery, and other companies or cash it receives from selling these investments. It reflects how the company is investing for its future.
- Cash flow from financing indicates whether the company is raising or repaying money, either through debt or equity. It shows how the company is managing its financial resources.
