Glossary · Reading the business
Cash flow statement
In short
A financial report showing how much cash a business generates and uses over a period, broken down by operating, investing, and financing activities. Buyers care because it shows the true liquidity of the business, beyond just profit.
What it means in a deal
The cash flow statement is crucial because a profitable business can still have cash problems. It reveals how cash moves in and out, helping you identify if the business generates enough cash from operations to fund itself, pay debts, and provide owner compensation. Always review this alongside the P&L and Balance Sheet.
Related terms
Common questions about Cash flow statement
- Can future cash flow or profits from the acquired business count as equity injection?
- How can an SBA 7(a) loan help with ongoing cash flow for my business?
- What is the primary factor a lender considers when evaluating the cash flow from an acquired business?
- Are there any restrictions on the use of cash flow projections for an SBA 7(a) acquisition loan?
- Can I use an SBA 7(a) loan for my business's daily operating expenses or cash flow?
- How does a lender evaluate the reasonableness of a borrower's projections for future revenue and cash flow?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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