A statement of cash flows presents the sources and uses of cash for a business.
While a balance sheet shows what a company owns and owes and an income statement shows what a company has earned and expended, the statement of cash flows shows where cash came from and where it went.
In general, there are three components to the statement of cash flows:
Operating activities – This is the cash flow from the primary business activity of a company.
Investing activities – This is the cash flow from the purchase and sale of assets.
Financing activities – This represents the cash flow from borrowing, repayment of debt, or related to capital activity.