You are the president of a non-profit organization that has grown quickly over the last few years. For the first time, you have had an independent accountant audit your financial records. Upon the recommendation of the accountant, your staff has begun preparing a statement of cash flows.

The organization is overseen by a volunteer board of directors. They meet monthly to review the financial stability of the organization and to assist management in developing long-range plans. At each meeting, you present the financial statements from the previous month.

Required:

Since most of the members of your board are not familiar with the statement of cash flows, prepare a short explanation of the purpose and use of the statement.