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There are three major parts of a cash flow statement: cash flow related to operational expenses, cash flow related to investing activities, and cash flow related to financing activities. This type of information is particularly important to executives who might be trying to determine if a company can support some type of business expansion plan. Cash flow related to operational expenses would include money spent to purchase inventory or pay rent, as well as money taken in exchange for the goods and services produced by the company. Cash flow related to investing would be related to the purchase and sale of non-current assets (building or equipment purchases, sales of investments). Finally, cash flow related to financing would include money related to the purchase and/or sale of bonds, issuing stock and paying out dividends). In addition to being important to executives, any employee would probably do well to understand the financial position of his/her employer to understand the possibilities for future growth with the organization.
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