Statement of Cash Flows
The Statement of Cash Flows monitors the flow of cash in and out of your organization over a period of time. This statement also identifies the sources and uses of your organization’s cash.
Having income after expenses, also known as “net profit” does not mean that an organization has cash readily available to support new activities or projects.
If too many of your organization's assets are tied up in your inventory, (e.g. equipment and property), or if you do not generate enough revenue to meet your regular operating costs (personnel, supplies, rent, utilities, promotion), an organization may have difficulty meeting short-term expenses and may even run out of cash.