Cash Flow Statement
Definition
A financial statement presenting the actual movement of cash into and out of the business over a period, organised into three sections: operating activities, investing activities, and financing activities. The cash flow statement reconciles the opening and closing cash balance for the period. It is the authoritative statement of the company's liquidity position and is distinct from the income statement, which reports economic performance on an accrual basis without reflecting cash timing.
Common Misapplication
The most common misapplication is using the income statement as a proxy for cash position. A company can report positive net income on an accrual basis while consuming cash, particularly where revenue is recognised before cash is received or where capital expenditure is not reflected in the income statement.
FFI Standard Reference
This term is defined and applied in Book 1, Section 1.1: The Three-Statement Standard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Cash Flow Statement. https://ffistandard.org/glossary/cash-flow-statement/. 2026.