what is cash flow analysis

Cash flow analysis is a financial evaluation that examines the cash that flows into and out of a company, providing insights into its financial stability and health. It involves reviewing the cash flow statement, which typically includes three sections: operating activities, investing activities, and financing activities. This analysis is important for understanding a company's working capital and its ability to run and grow the business. It helps in identifying trends, areas of strong performance, cash flow problems, and opportunities for improvement. Cash flow analysis is used by companies, investors, and analysts to make informed decisions about financing, cost- cutting, and income generation. It is also essential for evaluating a company's liquidity, flexibility, and overall financial performance