One of the most important items that can be extracted from the financial statement of a company or firm is the actual CASH FLOW of the firm.
Cash flow is not the same as working capital, or many other finance terms used to describe the financial situation. Cash flow is money coming into the firm which can be used for growth or investing.
Consider a simple equation: PV = C/r. This is ordinarily defined as the present value (PV) of an investment or annuity is equal to the cash flow (C) divided by the rate of return. In other words, money (cash flow) in the future has a different value that it would have right now. Depending on the rate, it can vary significantly. But cash flow is in the numerator and is the term we want to develop.