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The difference of cash flow statement from balance sheet and net income are a balance sheet, or statement of financial position, is a summary of the financial balances of a company, while a cash flow statement, or statement of cash flows, shows how the changes in balance sheet accounts and income on the income statement affect a company's cash position. A company's cash flow statement measures the flow of cash in and out of a business, while a company's balance sheet measures it assets, liabilities and owner's equity. The cash flow statement is broken down into three parts, the operating activities, financing activities and investing activities. The cash flow is important because it later becomes payment for things that make the business run, expenses like stock or raw materials, employees, rent and other operating expenses. Cash flow role is in the profits/losses of the organization business. A company's operating activities are comprise of the revenue generating activities of a business, such as cash received from customers; cost of goods sold, salary and wages, rent and office expenses. A company's financing activities are comprised of activities that change the equity or borrowing of a company, such as dividend payment, share repurchases and the sale of shares. When the calculations show that the net income statement is positive but the business fails, this is when the company offers it product with less price or when the company cannot provide the quality product or competitor launch the product with high definition at the same price.
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