The cash flow statement is one of the essential financial statements of a company, along with the income statement and balance sheet. It details how a company's cash is generated and used within a specific timeframe. The statement is usually divided into three main sections: operating activities, which reflect the cash flow from core business operations; investing activities, which show inflows and outflows related to purchasing and disposing of assets; and financing activities, which include transactions related to debt, equity, and dividends. For example, a company's cash flow statement might indicate that it used $100,000 for acquiring new equipment (investing activities), but generated $150,000 from product sales (operating activities). This format allows stakeholders to assess the company's financial health and operational efficiency.

Understanding the cash flow statement is crucial for evaluating a company's ability to pay its suppliers, meet payroll, or invest in growth initiatives. It ties in with terms like "balance sheet" (which shows the company’s assets and liabilities), "Capex" (capital expenditures included in the investing section), and "accrual accounting" (which differs from the cash basis of cash flow reporting). Stakeholders use this statement to make informed decisions regarding investments, risk assessments, and evaluating a company’s financial sustainability.