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Accounting
Statement of Cash Flows
A financial statement that shows exactly how much cash came in and went out during the period and why.
It has three sections: operating activities (day-to-day business), investing activities (buying/selling long-term assets), and financing activities (loans, stock, dividends). It explains the change in the cash balance.It's like a security camera video that shows every dollar walking in and out of your house so you can see where the money really went.
Real world: Even if the income statement shows a big profit, the statement of cash flows might reveal the company actually spent all its cash on new equipment.
💡 The statement of cash flows tells the real story of cash — profits on paper don't matter if the bank account is empty.