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What is a cash flow statement and why is it important for investors?

A cash flow statement is a financial document that shows the actual cash coming into and going out of a company. It’s crucial for investors because it reveals the “real deal” – whether the company is actually receiving cash from its business operations. Even if a company reports high revenues or profits, it doesn’t necessarily mean cash is coming in. The cash flow statement helps investors see if the company is truly profitable in cash terms, which is often more important than reported profits.

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