Theory

Key Terms & Definitions

Cash Flow — The movement of cash inflows and outflows within a business over a period, critical for liquidity and tax planning.

Cash Flow Statement — An IFRS-based report showing how cash is generated and used through Operating, Investing, and Financing activities.

Operating Activities — Cash flows from day-to-day business operations, including customer receipts, supplier payments, and salaries.

Investing Activities — Cash movements related to purchase or sale of long-term assets, such as equipment or property.

Financing Activities — Cash flows related to loans, equity injections, and repayments.

Bank Reconciliation — The process of matching internal cash records with bank statements to identify timing differences or errors.