There are three types of financial statements that every business needs to understand to keep their business running smoothly: the income statement, the balance sheet and the cash flow statement. Recently, Quickbooks wrote an article covering the cash flow statement, a critical piece of analysis for small businesses.
Unlike the balance sheet and income statement, which are great for understanding the overall financial health of the company, the cash flow statement shows the complexity of funds moving through your company over time. Understanding cash flow is essential for small businesses, who often are working on paper-thin margins and usually do not keep large reserves of cash on hand.
In this Quickbook article, author Rochelle Bailis walks small business owners and managers through the complexities of the cash flow statement and helps you understand how to create and analyze this important piece of your business.