The cash flow statement is one of the four major accounting statements. "Cash is king" is an age-old saying that is popular in business. The cash flow statement is a report, like the income statement and balance sheet, that firms use to explain changes in their cash balances over a period of time by identifying all of the sources and uses of cash for the period spanned by the statement. The focus of the cash flow statement is the change in the firm's cash balance for the period of time covered by the statement (i.e., one year or one quarter). The cash flow statement uses information from the firm's balance sheet and income statement to identify the net sources and uses of cash for a specific period of time.

• Discuss three ways the cash flow statement assists users.
• Explain what is meant by the statement "Cash is king.