Companies receive inflows of cash revenue from selling goods, providing services, selling assets, earning interest on investments, rent, taking out loans or issuing new shares. Cash outflows can result from making purchases, paying back loans, expanding operations, paying salaries or distributing dividends. Since the Securities and Exchange Commission (SEC) requires all listed companies to use accrual accounting – which largely ignores the actual balance of cash on hand – investors and lenders rely on the statement of cash flow to evaluate a company's liquidity and cash flow management. It is a more reliable tool than metrics companies use to dress up their earnings, such as earnings before interest, taxes, depreciation and amortization EBITDA.

Hello Companies receive inflows of cash revenue from selling goods, providing services, selling assets, earning interest on investments, rent, taking out loans or issuing new shares. Cash outflows can result from making purchases, paying back loans, expanding operations, paying salaries or distributing dividends. Since the Securities and Exchange Commission (SEC) requires all listed companies to use accrual accounting – which largely ignores the actual balance of cash on hand – investors and lenders rely on the statement of cash flow to evaluate a company's liquidity and cash flow management. It is a more reliable tool than metrics companies use to dress up their earnings, such as earnings before interest, taxes, depreciation and amortization EBITDA.

Hie Rohith, Difference Between Cash Flow and Funds Flow Statement : ======================================================= **Cash Flow** - Companies receive inflows of cash revenue from selling goods, providing services, selling assets, earning interest on investments, rent, taking out loans or issuing new shares. Cash outflows can result from making purchases, paying back loans, expanding operations, paying salaries or distributing dividends. - Since the Securities and Exchange Commission (SEC) requires all listed companies to use accrual accounting – which largely ignores the actual balance of cash on hand – investors and lenders rely on the statement of cash flow to evaluate a company's liquidity and cash flow management. It is a more reliable tool than metrics companies use to dress up their earnings, such as earnings before interest, taxes, depreciation and amortization EBITDA. **Fund Flow** - The statement of fund flow was primarily used by accountants to report any change in a company's net working capital during a set period of time. Much of this information is captured in the statement of cash flow. - The investing use of fund flow is more useful today. Here, overall investor sentiment can be gauged as it relates to different asset classes. If the flow of funds for equities is positive, for example, it suggests that investors have a generally optimistic view of the economy (or at least the short-term profitability of listed companies).