Cash flow statement:

• It is the record of cash and cash equivalents that flow in and out of a company of a specific time. Where cash includes currency, check in hand, deposits in bank and cash equivalents include treasury bills, commercial papers that can be easily converted into cash.
• Cash flow statement thus helps us to understand from where the money is coming from and where it has to be spent.
• Cash flow statement can be classified as:

1. Cash flow from operating activities.
2. Cash flow from investing activities.
3. Cash flow from financing activities.