The ending balance on the cash flow statement always equals the amount of cash that a given company had at the end of the reporting period that the cash flow statement covered. The end balance is equal to the "cash and cash equivalents" line on the company's balance sheet.
Cash Flow Statement
The cash flow statement is one of three main financial statements that every company prepares, along with the income statement and the balance sheet. The cash flow statement tracks how cash from different business activities moves through the company. The statement lists three sections that generate or use cash -- operations, investing and financing -- before summing up the amount of cash that a company held in a given period.
All publicly traded companies use the accrual method in accounting, which records activities as they happen, not as money comes in or goes out. For example, a sale is recorded when a client signs a sales contract, not when the client pays the full amount. While the accrual method is very helpful for large companies, it can also obscure the resources that are currently available to the company. The cash flow statement sheds light on how hard money is generated and used by a business.
The income statement reports all of the revenues that the company brought in during a given period, but not all of that number comes from cash -- some of that revenue is accounts receivable or appreciation in short term investments or other things that the company expects to turn into cash but that are not actually cash. The balance sheet does list total cash. The balance sheet also lists all assets and liabilities and covers everything that a company currently owns and owes, which may have come from past reporting periods.
Every cash flow statement has two dates on it: the start of the reporting period and the end of the reporting period. The end balance is the total cash that a company has on the day that the reporting period ended. However, any transaction can change that number -- a debit to a company expense account, a client that pays the balance of what he owes -- and as time passes the last reporting period's ending balance becomes less current and less accurate.
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