Funds Flow Statement

Formal

A financial report which describes the periodic performance of a business, not in terms of its profitability, but of the performance in pure cash terms. It therefore describes the liquidity of the business and can highlight different trends from those that are obvious from an isolated review of the Earnings statement.

Straight Talk

Profits are different from cash. Companies can makes profits but have no cash, and companies can be losing money but have stacks of cash. This document converts all the past activity into cash terms, rather than profit terms. Used to review the ‘liquidity’ of a company to ensure that it has enough cash to fulfill operations.