In this paper, we examine the economic concept of cash flow as movement of cash in and out of the firm in the form of payments to suppliers and collections from customers. Cash flows typically arise from three sources: operations, investing, and financing. In addition, entities must file a Statement of Cash Flows as one of their required financial statements. The Statement of Cash Flows shows the movement of cash through operations (current assets and liabilities), investing (plant and equipment and investments), and financing (long-term financing and dividends). The importance and role of cash flow statement is analyzed in this paper from the business owner and the investor point of view.