What is a cash flow statement?

The cash flow statement is one of the three essential financial statements investors must understand to analyze businesses.

The purpose of the cash flow statement statement is to track cash movement. It shows how cash moves through a company over a period of time, such as a quarter or year.

A company’s cash flow statement can be compared to your personal checking account. It doesn’t care about transactions of goods and services being sold or when sales contracts are signed. It only tracks when money is deposited or withdrawn from a company’s bank accounts.

Unlike the income statement and balance sheet, cash flow statements use cash accounting, not accrual accounting.

Cash flow statement synonyms

Unfortunately, cash flow statements do not have a universal look or layout.

On top of that, management teams will often use interchangeable words and terms when creating their cash flow statements or discussing them with investors.

That's because executives have full control over the terms and layouts of their financial statements.

These factors can understandably confuse investors. For instance, you might hear a CEO talk about increasing free cash flow in the conference call, but when you look at the cash flow statement, you cannot find free cash flow.

To help dispel some of this confusion, here are other words that management teams can use when creating their cash flow statement.

CASH FLOW STATEMENT SYNONYMS:

→Cash Statement

→Statement of Cash Flow

→Financial Flow Statement

→Statement of Financial Flows

→Statement of Cash Operations

NET INCOME SYNONYMS:

→Profits

→Income

→Earnings

→Profit After Tax

→Earnings After Tax

NON-CASH CHARGES:

→Depreciation

→Amortization

→Write-downs

→Deferred Taxes

→Impairment Charges

→Stock-based Compensation

→Unrealized Gains and Losses

CHANGES IN WORKING CAPITAL:

→Credits

→Accruals

→Payables

→Provisions

→Inventories

→Receivables

→Prepayments

OPERATING CASH FLOW:

→Cash Profit

→Cash Income

→Operating Cash

→Cash from Operations

→Cash Generated from Operations

→Net Cash from Operating Activities

CAPITAL EXPENDITURES:

→Capex

→PPE Spend

→Plant Outlay

→Property Spend

→Facilities Spend

→Equipment Spend

→Infrastructure Spend

→Property, Plant, and Equipment (PPE)

ACQUISITIONS:

→Merger

→Takeover

→Asset Buy

→Consolidation

→Company Purchase

→Corporate Acquisition

PROCEEDS FROM SALE OF INVESTMENTS:

→Sale Gain

→Disposal

→Asset Sale

→Divestiture

→Liquidation

→Sale Proceeds

→Disposal of Investments

→Proceeds from Sales of Assets

→Proceeds from Disposition of Investments

NET CASH FROM INVESTING ACTIVITIES:

→Investing Cash

→Investment Flow

→Investment Outlay

→Cash from Investing

→Investing Cash Flows

→Cash Used in Investing

→Cash Flow from Investments

→Net Cash Used in Investing Activities

BORROW / REPAY DEBT:

→Debt Raised

→Loan Issuance

→Bond Issuance

→Debt Refinance

→Issuance of Bonds

→Borrowing Activities

→Repayment of Loans

→Debt Financing Activities

→Payments on Borrowings

→Debt Issuance/Repayment

→Proceeds from Issuance of Debt

ISSUE / REPURCHASE STOCK:

→Stock Sale

→Equity Issue

→Issuing Shares

→Equity Buyback

→Share Buyback

→Stock Issuance

→Equity Offering

→Stock Redemption

→Equity Repurchase

→Repayment of Share Capital

→Issuance of Equity Interests

→Repurchase of Equity Interests

PAY DIVIDENDS:

→Payouts

→Dividend Outlay

→Profit Distribution

→Dividend Allocation

→Distribute Earnings

→Dividend Remittance

→Dividend Distribution

→Dividend Disbursement

→Shareholder Dividends

→Cash Dividend Payment

NET CASH FROM FINANCING ACTIVITIES:

→Finance Cash

→Funding Cash

→Financing Flow

→Fund Injections

→Funding Activities

→Cash from Financing

→Cash from Financial Activities

→Net Cash Provided by Financing Activities

Key Takeaway

The cash flow statement is a vital tool for tracking the actual movement of cash within a business, offering insights that complement the income statement and balance sheet. By focusing on cash flow, investors gain a clearer picture of a company’s ability to generate, manage, and utilize cash effectively.

Understanding its structure and the interchangeable terms used by management ensures investors can accurately interpret a company’s financial health.