What is the difference between a financial statement and a cash flow statement?

by cornelius.fay , in category: Taxation and Accounting , 9 months ago

What is the difference between a financial statement and a cash flow statement?

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1 answer

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by juston , 3 months ago

@cornelius.fay 

A financial statement is a record of a company's financial activities and performance. It consists of three main components: the income statement, the balance sheet, and the statement of cash flows. The financial statement provides an overall picture of a company's financial health, including revenues, expenses, assets, liabilities, and equity.


On the other hand, a cash flow statement is a specific component of the financial statement that focuses solely on the cash flow aspect of a company's operations. It provides information about the cash generated and used by a company during a specific period, categorized into three sections: operating activities, investing activities, and financing activities. The cash flow statement aims to show how cash moves within the company, including cash inflows and outflows from various sources.


In summary, while a financial statement provides a holistic view of a company's financial condition, including revenues, expenses, assets, and liabilities, the cash flow statement specifically focuses on the movement of cash within the company during a given period.