"Cash flow" is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing and financing activities. It is one of the most vital elements in the survival of a business. It can be positive, or negative, which is obviously a most undesirable situation. Funds are not only generated internally; they may be externally generated

The aim of a cash flow statement should be to assist users:

To assess the company's ability to generate positive cash flows in the future
To assess its ability to meet its obligations to service loans, pay dividends etc
To assess the reasons for differences between reported and related cash flows
To assess the effect on its finances of major transactions in the year. The statement therefore shows changes in cash and cash equivalents rather than working capital.