Which financial statement provides insights into cash inflows and outflows?

The statement of cash flows is designed specifically to provide detailed information about cash inflows and outflows during a specific period. It categorizes cash movements into three main activities: operating, investing, and financing. This statement helps stakeholders understand how a company generates and uses its cash, which is essential for assessing liquidity, financial flexibility, and overall financial health.

In contrast, the balance sheet presents a snapshot of a company's financial position at a single point in time, showing its assets, liabilities, and shareholders' equity, without detailing cash movements. The income statement focuses on revenues and expenses over a period, providing insight into profitability but not cash management. The shareholders' equity statement outlines changes in equity accounts but does not reflect cash transactions directly. Thus, the statement of cash flows is the most relevant for understanding cash inflows and outflows.