A cash flow statement is a key financial statement that records the amount of cash that comes into and goes out of a company over a specific period.
For example, a lender reviewing a company's loan application examines the cash flow statement to confirm the business generates enough cash from operations to comfortably cover its proposed $4,200 monthly loan payment.
Why it matters: It bridges the gap between the income statement and balance sheet, showing exactly where cash was generated and where it went.
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