Cash flow statement
The cash flow statement shows the change in cash over a period, split into cash flow from operating, investing and financing activities; for larger companies it is part of the annual accounts.
Definition
It answers the question the balance sheet and income statement leave open: why is there no money despite a profit? The answer usually sits in the operating section — an increase in inventories and receivables — or in the investing section.
For smaller companies it is not required. As a management tool it is nevertheless the third statement that should be prepared once a year.
Where to read it
What the software must be able to do
Check whether the software can derive a cash flow statement or whether an export to a spreadsheet is needed. The indirect method can be computed from two balance sheets and the income statement — provided the prior-year figures are available.
Checked Aug 2026
More terms under Bookkeeping and retention: Accrual principle Accrued liabilities Annual accounts Association accounting Balance sheet Balance sheet total Book value Break-even point Business assets Business expenses Cash book Cash receipts Contribution margin Cost centre Current assets Debit and credit Depreciation Double-entry bookkeeping Duty to keep accounts EBIT EBITDA Equity Equity ratio Financial year Fixed assets Fixed costs Foreign currency General ledger Gross profit Hidden reserves Income statement Inventory count Journal Journal entry Liabilities Liquidity Loss carry-forward Membership dues Net profit Opening balance sheet Overheads Pass-through item Prepaid expenses Provision Record-keeping ordinance Reserves Retained profit Simple accounts Swiss SME chart of accounts Tamper resistance Turnover Value adjustment Variable costs Volunteer-run structure Voucher Year-end closing modules