As a financial manager for his firm, Martin Meyer is worried about possible cash shortages his firm might face over the next few months. The statement of cash flows budget would help him identify periods when cash might be very tight.
A statement of cash flows or a cash flow statement is a financial statement that will show how different income can affect the cash on hand and cash items. This allows a business to see when cash may be in a surplus or when they need more funds to cover certain areas. This shows the differences in the balance sheet and breaks down operating, investing and financing operations.
