The income statement module ends with a conclusion: the net income is not a flow of funds.

It is therefore essential to produce a financial document that describes the evolution of the cash held by the firm as a consequence of its profitability, its investments and its financial strategy.

The cash flow statement summarizes the funds generated by the activity, the building of the future (organic and external growth) and the financing policy (dividends, debt, issue vs. share repurchase).

This document is technically complex, but it is the most strategic because it is at the crossroads of the decisions and results that make up the core of sustainable value creation.

Exercise related to the video

Once you’ve watched the video, you can do an exercise to practice what you’ve just learned and assess your understanding of the cash flow statement.