Why Product Managers Should Care About Cash Flow Statements
They cut through the complex nature of accrual accounting
Cash Flow Statements are probably the hardest type of financial statement for product managers. You should understand Income Statements and Balance Sheets before you try to understand a Cash Flow Statement. Cash Flow Statements can be the most useful financial statement for a product manager. They strip away the complexity of accrual-based accounting. They show how cash moves into and out of a business. Product Managers Should Care About Cash Flow Statements.
What Are The Components of a Cash Flow Statement?
A Cash Flow Statement summarizes the amount of cash and cash equivalents entering and leaving a business. It has three major components:
- Cash from operating activities
- Cash from investing activities
- Cash from financing activities
From a product manager’s perspective, the cash from operating activities section is the most valuable. The other sections are interesting, but not as relevant.
