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In this tutorial, we discuss the cash flow statement, one of the three main financial statements, often overlooked. While the income statement details revenue and profits over time and the balance sheet shows financial health at a specific moment, the cash flow statement reveals how effectively a business manages its cash and expenditures. Cash is essential for operations, as it allows businesses to pay employees, vendors, and taxes. The tutorial highlights the distinction between cash and accrual accounting, emphasizing that profits and cash can differ. Profit is calculated as revenue minus expenses, with revenue recognized when earned, and expenses when incurred.
