The cashflow statement: the Treasurer's friend

What is it? Permjit Singh Treasury Consultant finds out

Running out of cash (liquidity risk) is a Treasurer's primary concern among the financial risks faced by their company, ahead of interest and currency risk.

This is simply because without cash, a company cannot survive.

The cashflow statement provides the treasurer with a useful summary of where a company's cash has come from and where it has gone, over a period of time, such as a financial year.

It has three sections: cash from operations, cash from investing activities, and cash from financing activities.  A summary section shows the cash at the start of the period, the net increase or decrease in cash during the period, and the cash at the end of the period.

The P&L and Balance sheet statements are the source of the data for the cashflow statement.

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