Cash flow

The cash flow statement that shows whether or not your business has enough cash to operate. Your business could have great income and profits, but if you don't have enough cash in the bank to pay the bills, you could go under. The statement of cash flow represents the company's ability to have a sustainable positive cash flow.

A typical statement of cash flow is similar to a profit and loss statement because it shows what's coming in and what's going out. It will always start with the cash balance as of the beginning of the period and end with the ending cash balance. A pro forma statement will show the estimated cash flow over a several periods. Below is an example of a cash flow statement.