Which financial statement summarizes cash inflows and outflows?

The statement of cash flows is the financial statement that specifically summarizes cash inflows and outflows over a certain period of time. It is divided into three main sections: operating activities, investing activities, and financing activities.

Operating activities reflect the cash generated or used in the core operations of the business, such as cash received from customers and cash paid to suppliers. Investing activities detail cash transactions for the purchase and sale of long-term assets, while financing activities pertain to cash flows related to borrowing, repaying debt, and equity transactions.

This statement provides crucial insights into a company's liquidity and financial health by tracking the movement of cash, which is vital for meeting obligations, funding operations, and making strategic investments.

In contrast, the income statement focuses on revenues and expenses to determine net income, the balance sheet presents the company's financial position at a specific point in time using assets, liabilities, and equity, and the statement of retained earnings outlines changes in equity over a period but does not directly provide information on cash movements.