The cash flow statement tracks real money moving in and out during a period. Unlike profit, which can be recorded before cash arrives, this statement only counts cash when it actually changes hands.
Three buckets of cash
| Activity | What it covers | What it usually tells you |
|---|---|---|
| Operating | Day-to-day business: cash from customers, paid to suppliers and staff | Whether the core business generates cash |
| Investing | Buying or selling long-term assets and investments | Whether the company is growing or shrinking |
| Financing | Borrowing, repaying loans, issuing shares, paying dividends | How the business is funded |
Every cash movement belongs to exactly one of these three groups.
Operating cash flow is the one most people watch first. A healthy business should usually generate positive cash from its daily operations, because that is the money that keeps it alive.
- Operating: cash collected from customers minus cash paid to suppliers and employees.
- Investing: cash spent on new machinery or received from selling assets.
- Financing: cash raised from lenders or shareholders, and cash returned to them.
Reconciling opening to closing cash
The statement is a simple bridge. It starts with the cash the company began the period with, adds the three cash flows, and lands on the cash it holds at the end.
Closing cash = Opening cash + Operating + Investing + Financing cash flows
This closing figure also appears as the cash asset on the balance sheet.
Cash flow explorer
Profit is an opinion; cash is a fact. See how the three cash flow sections combine.
+₹300 Cr
Cash from the everyday running of the business — selling goods, paying suppliers and staff.
−₹170 Cr
Cash used to buy or sell long-term assets and investments — like building a factory.
+₹60 Cr
Cash from or returned to lenders and shareholders — debt, equity, dividends.
Opening cash
₹150 Cr
Net change in cash
+₹190 Cr
Closing cash
₹340 Cr