StocksResult
📝 What is a Cash Flow Statement?
💵 What is a Cash Flow Statement? Imagine you have a piggy bank 🐷 where you put your pocket money every week.
Sometimes you add money 💰, sometimes you take out for ice-cream 🍦 or toys 🚗.
At the end of the month, you check:
How much money came in? ➡️
How much money went out? ⬅️
What is left in your piggy bank now? 🐷
This is exactly what big companies do too — but they call it the Cash Flow Statement! 📃💵
🎯 Why is the Cash Flow Statement Important?
You may wonder: "Company earns profit, why care about cash flow?" 🤔
Because a company can show profit on paper 📄 but still have no cash in hand! 😱
💥 Profit is theory... but Cash is Reality! 💥
No cash = No salary 💸, No rent payment 🏠, No raw material 🚚
Even a profitable company can collapse without enough cash!
So cash flow tells:
✔️ Is money flowing into the company regularly?
✔️ Where is money going out fast?
✔️ Is the company self-sufficient or always borrowing?
🔍 What does the Cash Flow Statement Show?
It is like checking 3 water tanks 🚰:
1️⃣ Operating Activities (Daily Business Water Tank)
💡 Money from main business: selling products or services!
Example:
✔️ Company earns ₹50,000 selling mobiles 📱
❌ Spends ₹30,000 on raw materials, salaries 👷♂️
Cash from Operating Activities = ₹20,000 left 💰
If this is always positive = Company runs its daily shop smoothly!
2️⃣ Investing Activities (Future Growth Water Tank)
💡 Money spent on buying or selling big things like land 🏭, machines ⚙️, or shares 📈.
Example:
❌ Buys new factory machine = ₹10,000 out
✔️ Sells old shop building = ₹5,000 in
Cash from Investing Activities = ₹5,000 Outflow 🚪
Negative here? Not bad — means company is growing! 🌱
3️⃣ Financing Activities (Loans & Investors Water Tank)
💡 Money from bank loans 💳, investors 💼, or giving dividend 💵.
Example:
✔️ Takes ₹15,000 loan from bank 🏦
❌ Pays ₹5,000 as dividend to shareholders 🎉
Cash from Financing Activities = ₹10,000 Inflow 💰
Final Result?
Just like checking your piggy bank:
Cash In ➖ Cash Out = Net Cash
👉 If the result is positive = Cash in hand increased! 🤑
👉 If negative = Company burned more cash than it got 😥
🎨 Funny Example:
Your friend Bunty runs a juice shop 🍹:
✔️ Sells juices = ₹1,000 cash in
❌ Buys oranges = ₹400 out
❌ Repairs fridge = ₹200 out
✔️ Takes ₹500 loan from friend
Total Cash Flow = ₹1,000 + ₹500 – ₹400 – ₹200 = ₹900 cash in hand 💰
Bunty is safe and can enjoy a samosa! 😂🥟
🚨 Red Flags Investors Must Watch:
❌ Negative cash flow from daily operations 😨
❌ Too much borrowing to survive 💳
❌ No cash left for emergencies! 🔥
💡 What Smart Investors Should Check:
✔️ Is the company earning cash daily? (Operating activities positive?)
✔️ Is the company investing wisely for the future? (Not wasting cash?)
✔️ Is the company not borrowing too much? (Safe balance?)
🏆 Golden Formula of Cash Flow:
Cash In – Cash Out = Net Change in Cash
Just like your wallet at month-end! 👛
No cash flow = Business breathless 💨
🎯 Summary for Every Investor:
✅ Cash is King! 👑
✅ Profit can fool you — but cash flow reveals truth 💡
✅ See if cash from business is healthy and rising 📈
✅ Bad cash flow = Danger ahead ⚠️
🎈 Funny Tip for You:
If company cash flow looks weak — Run faster than you run from online sales ads! 🏃♂️🏃💨😂
🔍 Final Gyaan:
"Before buying shares, peep into company’s pocket (cash flow),
Not just its report card (profit)!" 📋💼
This way, you’ll stay away from cash-hungry traps and become a smart investor! 💹🧠