... and cash outflows over the coming months. Each column shows money coming into and out of the business in that month. The cash flow statement takes information from a variety of sources to show an overall picture of the monies flowing into and out of the business during the financial year. The statement then shows the effect of each month's cash flow upon the business's cash balance/total. One essential rule to the cash flow statement construction is that money is shown when it is received or paid. Therefore it is important to emphasise that the profit of the business may be significantly different from the cash flow. The statement is intended to show information that is not available from examining the profit and loss account and balance sheet. The statement concentrates on liquidity. The cash flow statement shows if there is sufficient cash available each month. Although the company may be profitable ...

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