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Finance GlossaryCash Flow Statement
Cash Flow Statement
Definition of Cash Flow Statement
A cash flow statement is used to present the amount of money that has been earned and spent by a business over a specific period of time. There are three sections or parts to a cash flow statement:
- Operating Activities: cash flows from the core activities of a business that generate income as well as cash equivalents (current assets & liabilities)
- Investing Activities: cash flows from investments or sales of long term assets
- Financing Activities: an action or activity that brings a change in a business’ equity capital and/or borrowings
Related Terms
Equity Shares
Equity shares is a term used to describe stock of a company that’s issued via an Initial Public Offer (IPO), already issued and traded on the stock market, or freshly available through a Follow on Public Offer (FPO).
For a company, the goal of issuing equity shares is to raise money while investors who buy these equity shares get perks like voting rights, dividends, and even a share of the assets in case the company is liquidated.
For a company, the goal of issuing equity shares is to raise money while investors who buy these equity shares get perks like voting rights, dividends, and even a share of the assets in case the company is liquidated.
Macro Analysis
Macro analysis is the study of broad economic factors that influence financial markets as a whole. It includes interest rates, inflation, economic growth, government policies, and global events that shape overall market direction.
Arbitrage
Arbitrage is a strategy where a security is bought in one market and sold in another market to generate profits due to the difference in price. This difference is known to be minor.
Say for example a share trades at Rs. 1000 on NSE and Rs. 1002 on BSE. The share can be arbitraged by buying it on BSE and selling it on BSE for a profit of Rs. 2.
Say for example a share trades at Rs. 1000 on NSE and Rs. 1002 on BSE. The share can be arbitraged by buying it on BSE and selling it on BSE for a profit of Rs. 2.
Time Value of Money (TVM)
Time Value of Money (TVM) is the concept that money available today is worth more than the same amount in the future due to its earning potential. It forms the foundation of financial decision-making and valuation. TVM is applied in investments, loans, discounting cash flows, and retirement planning.
Theta
Theta measures the rate at which an option loses value as time passes, assuming other factors remain constant. It reflects time decay, which accelerates as the option nears expiry. For option buyers, theta works as a cost over time, while for option sellers, it can be a favourable component of returns.
Triple Top
A triple top is a bearish chart pattern where a stock or index reaches the same resistance level three times but fails to break above it. This repeated failure signals weakening buying momentum and a potential trend reversal from uptrend to downtrend. For example, if a stock rises to ₹500 three times over several months and falls each time, it may form a triple top, indicating a possible decline ahead.
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