The cash flow statement reflects a firm's liquidity. The statement captures both the current operating results and the accompanying changes in the balance sheet. The statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills.

People and groups interested in cash flow statements include:

Accounting personnel, who need to know whether the organization will be able to cover payroll and other immediate expenses

Potential lenders or creditors, who want a clear picture of a company's ability to repay

Potential investors, who need to judge whether the company is financially sound

Potential employees or contractors, who need to know whether the company will be able to afford compensation

Shareholders of the business (if any)

The cash flow statement is a cash basis report on three types of financial activities: operating activities, investing activities, and financing activities. Non-cash activities are usually reported in footnotes.

The cash flow statement is intended to:

provide information on a firm's liquidity and solvency and its ability to change cash flows in future circumstances

provide additional information for evaluating changes in assets, liabilities and equity

improve the comparability of different firms' operating performance by eliminating the effects of different accounting methods

indicate the amount, timing and probability of future cash flows