• A cash flow statement is like a report card for a company.

• It shows how much money comes in and goes out, just like keeping track of your piggy bank.

Why Check Cash Flow?

• Cash flow is super important to see if a company has enough money to keep running.

• Helps the company know if it can buy new things or pay workers.

Cash Flow vs. Profit

• Cash flow is all about real money moving in and out.

• Profit is just numbers, sometimes guesswork about how much money is actually earned.

Understanding Money Health

• Liquidity: How fast can the company turn toys (assets) into cash?

• Solvency: Can the company pay its bills when they’re due?

Money Movement (Cash Flow Cycles)

• Short-Term: Day-to-day money, like buying supplies.

• Long-Term: Big money for things that last a long time, like buildings.

What’s in the Cash Flow Statement?

• Operating Activities: Money from selling and paying bills.

• Investing Activities: Money spent or earned from big purchases.

• Financing Activities: Money coming in from loans or going out for paying back loans.

How to See the Cash Flow

• Direct Method: Lists every cash in and cash out like a shopping list.

• Indirect Method: Starts with profit and changes it by adding or removing non-cash items.

Examples of Money Movements

• Operating Cash Flow: Money from selling snacks or toys.

• Investing Cash Flow: Buying a new bike or selling an old one.

• Financing Cash Flow: Getting money from friends or paying them back.

Different Ways to Show Money Spent

• Money spent on interest can be shown in two different spots on the money report, which can change how we see the total money flow.