This document discusses cash flow statements and their importance for businesses. It provides definitions and explanations of key terms: - A cash flow statement summarizes the changes in a company's cash position between two balance sheet dates. It shows cash inflows and outflows. - Cash flow statements are based on actual cash amounts, while funds flow statements are based on working capital and can include non-cash items. - Cash flow statements are more useful for short-term analysis and cash planning as they show a company's immediate liquidity, while funds flow statements are better for long-term planning.