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Cash Flow Statement: What Is It and How to Read It In business, maintaining positive cash flow is vitally important. Cash flow refers to the movement of cash in and out of a business as it generates revenue while also covering its operating expenses. A cash flow statement is a way to summarize cash flow activity and analyze trends. Understanding how to read (or write) a cash flow statement is important for measuring the financial health of your business. And if you’re an investor, cash flow statements can offer insight into a company’s financials to help you decide whether it belongs in your portfolio. Cash Flow Statement, Explained A cash flow statement is essentially a snapshot of a business’s cash flow during a set time frame. This is also referred to as an accounting ...