The cash flow statement is the third of the three financial statements. It reconciles profit to the actual movement in cash.
Why it exists
Profit and loss shows what was earned. The bank balance shows what was received. They differ, sometimes by a great deal, and the reasons are not visible on either statement alone.
The cash flow statement lists those reasons — see profit and cash for the underlying idea.
Three sections
Operating — cash generated by trading. Profit adjusted for costs that were never paid out, such as depreciation, and for changes in money owed to and by the business.
This is the section that matters most. A business whose operating cash flow is consistently negative is consuming cash to trade, whatever its reported profit.
Investing — money spent on or received from assets: vehicles, equipment, property.
Financing — money from lenders and owners, and money returned to them. Loans drawn and repaid, distributions, owner contributions.
Reading it
The common shape of a healthy growing business is positive operating cash, negative investing cash, and financing that varies.
The shape worth noticing is positive total cash driven by financing while operating cash is negative. It means the trading is being funded by borrowing.