Cash Flow Statement

What is Cash Flow Statement?

The cash flow statement shows where your cash came from and where it went during a specific period. Unlike the P&L (which can include non-cash items like depreciation), the cash flow statement tracks actual money movement.

It's organized into three sections: operating activities (cash from running the business), investing activities (cash spent on or received from assets), and financing activities (cash from fundraising or debt).

For startups, the cash flow statement often reveals a different story than the P&L. You might show revenue on the P&L that hasn't been collected yet, or expenses that were prepaid. The cash flow statement shows the actual cash reality.

Why it matters

Cash is survival. The cash flow statement tells you whether your cash position is improving or deteriorating — and why. A company can be "profitable" on a P&L but still run out of cash if customers pay slowly.

For runway management, the cash flow statement is the most relevant financial statement because it directly measures cash depletion, which is what determines your runway.

Formula

Net Cash Flow = Operating Cash Flow + Investing Cash Flow + Financing Cash Flow
Ending Cash = Beginning Cash + Net Cash Flow

Example

How RunwayCal helps

Common mistakes

• 1Relying only on the P&L without checking the cash flow statement (the P&L can be misleading about actual cash position)
• 2Not distinguishing between recurring operating cash flows and one-time financing events
• 3Ignoring the timing differences between when revenue is recognized and when cash is received