The primary objective of a Cash Flow Statement is to provide useful information about the cash flows (inflows and outflows) of an enterprise during a particular period under various heads, i.e., operating, investing, and financing activities.

When used along with other financial statements, it enables users to evaluate changes in net assets and the financial structure of an enterprise, including its liquidity and solvency. It also helps in assessing the ability of the enterprise to generate cash and cash equivalents and the needs of the enterprise to utilise those cash flows.

Additionally, it enhances the comparability of the reporting of operating performance by different enterprises by eliminating the effects of using different accounting treatments. It provides a basis to users for making economic decisions by evaluating the timing and certainty of cash flow generation.