Related Terms: Financial statements. A cash flow statement is a financial report that describes the sources of a company’s cash and how that cash was spent over a specified time a _________ describes how a company makes money. It does not include non-cash items such as depreciation. This makes it useful for determining the short-term viability of a company, particularly its ability to pay deacribes. Because the management of cash flow is so crucial for businesses and small businesses in particular, most analysts recommend that an entrepreneur study a cash flow statement at least every quarter. The cash flow statement is similar to the income statement in that it records a company’s performance over a specified period of time. The difference between the two is that the income statement also takes into account some non-cash accounting items such as depreciation. The cash flow statement strips away all of this and shows hlw how much actual money the company has generated.