Cash flow statement

The cash flow statement (naudas plūsmas pārskats) is the part of the financial statements that shows cash flows from operating, investing and financing activities separately, together with the cash balance at the start and end of the financial year.

Medium and large companies must prepare one. Small companies, including micro-entities, may limit their financial statements to the balance sheet, the profit or loss account and the notes.

Operating cash flow may be worked out with the direct method, from cash transactions, or the indirect method, starting from profit before corporate income tax and adjusting it for items such as depreciation, provisions and changes in debtors, inventories and creditors.

Profit and cash are not the same: a company can make a profit and still run out of cash if clients have not yet paid their invoices or the money is tied up in stock.