The cash flow statement explains the real movements of money during a period, showing how cash comes into and goes out of the business. Unlike the income statement, it is not based on accrual accounting but on actual receipts and payments. It is divided into three blocks: operating cash flow (CFO), which measures whether the business generates cash on its own; investing cash flow (CFI), which reflects purchases or sales of assets and other investments; and financing cash flow (CFF), which records funds coming in or going out through loans, dividends or capital increases. Analysing the cash flow statement tells you whether accounting profit turns into real money, whether the company invests sustainably and how its growth is financed. It is the key report for understanding the liquidity and survival capacity of the business.

• CFO (Operating cash flow)
• CFI (Investing cash flow)
• CFF (Financing cash flow)

• A positive CFO indicates that the business generates cash on a recurring basis.
• A negative CFI is usually a sign of investment in growth or asset renewal (normal and healthy).
• A positive CFF shows an inflow of financing or capital; a negative one, debt repayment or dividend payouts.

• Simple cash flow
• Debt/EBITDA
• Interest coverage