What does the cash flow statement primarily illustrate?

The cash flow statement primarily illustrates the cash generated or lost during a specific period. This financial statement breaks down cash inflows and outflows into three main categories: operating activities, investing activities, and financing activities. By focusing on actual cash transactions, it provides insight into the liquidity and overall cash position of a business. Understanding cash flow is crucial for assessing an organization's ability to sustain operations, fulfill obligations, and invest in growth opportunities. It complements the income statement and balance sheet by highlighting how operating activities, investments, and financing decisions impact actual cash availability, which is essential for decision-making and financial health assessment.