Technical definition
A statement explaining changes in cash through operating, investing and financing activities.
How it works
Operating cash flows relate to core operations, investing cash flows to long-term assets and investments, and financing cash flows to owners and lenders. Together they reconcile opening and closing cash.
Everyday example
Operating +12,000, investing −20,000 and financing +15,000 produce a $7,000 increase in cash.
Common pitfall
Classification can vary by reporting framework; apply the chosen rules consistently and disclose them.