Question

How cash flow statement is different from income statement? What are the additional benefits to different users of accounting information from cash flow statement?

29 Oct 2021
Answer :
Word Count : 830

The cash flow statement and the income statement are integral parts of a corporate balance sheet. The cash flow statement or statement of cash flows measures the sources of a company's cash and its uses of cash over a specific period of time.

The income statement measures a company's financial performance, such as revenues, expenses, profits, or losses over a specific period of time. This financial document is sometimes called a statement of financial performance. An income statement shows whether a company made a profit, and a cash flow statement shows whether a company generated cash.

The cash flow statement and the income statement, along with the balance sheet, are the three main financial statements. The cash flow statement and income statement integrate with the corporate balance sheet.

The cash flow statement is linked to the income statement by net profit or net loss, which is usually the first line item of a cash flow statement, used to calculate cash flow from operations.

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