Module 3: Cash Flow
Cash flow statements
By now, you know that a cash flow statement tells the story of your business:
- How much money you have.
- How much is moving in and out.
- Where it is coming from and going to.
- When cash is moving or needs to move.
Knowing these things will help you meet your financial obligations, run a profitable business and hopefully, identify opportunities for generating more cash to expand and grow. A cash flow statement will also tell you when the business is running short on cash so that you can take measures to avoid a shortfall.
If you are seeking financing, the cash flow statement will also be used by lenders to judge your credit readiness and the associated risk.
Next, let’s take a look at The Wired Cup’s sample cash flow statement so we can better examine the questions Bob had about his business.