Cash Flow Statement

Intermediate 💰 Finance / Accounting

Definition

A record of actual money moving in and out—the only financial statement that truly matters to people who need to eat.

Example Usage

The cash flow statement shows we had positive operating cash flow despite a net loss.

Origin

Became mandatory reporting requirement in 1988 under SFAS 95

Fun Fact

A company can be profitable on paper but bankrupt in reality due to poor cash flow

Source: Required financial statement under GAAP

Related Terms

Beginner

General Ledger

The master accounting record containing all financial transactions, organized by account. It's the single source of truth for a company's finances, assuming someone entered everything correctly.

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Intermediate

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Enterprise Value

A company's total value including debt and excluding cash, representing what you'd pay to own it outright and settle all obligations. It's market cap's more sophisticated cousin that actually understands capital structure.

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invoice

A formal piece of paper (or PDF) politely demanding money for goods or services already delivered, with the implicit threat of awkward follow-up emails. It's the business world's IOU in reverse, complete with line items, payment terms that nobody reads, and a due date that's more of a suggestion. The document that turns friendly business relationships into passive-aggressive email chains.

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revenue recognition

The accounting principle determining when revenue should be recorded, which sounds simple until you encounter multi-year contracts, partial deliveries, and customers who might return products. Getting this wrong is how good companies become accounting scandals.

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internal rate of return

The discount rate that makes the net present value of an investment zero—basically the breakeven return that justifies the project. If IRR exceeds your hurdle rate, it's theoretically a go; if not, it's a hard pass.

💰 Finance / Accounting

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