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Finance Dictionary and Glossary of Investment Terms
Statement of Cash Flow
An analysis of cash flow that presents a company''s sources and uses of funds. The statement focuses on cash and involves some nonintuitive leaps (an increase in accounts receivable is a use of cash, not a source), but to the educated eye it can provide a telling picture of where a company is headed with respect to liquidity. Sources of cash include net income, depreciation and reductions in inventory. Uses of cash include dividends declared as well as increases in current assets. A statement of cash flow reveals healthy or unhealthy trends and allows for at least the possibility of predicting future cash requirements.