How does the statement of cash flows differ from other financial statements?

The statement of cash flows is unique among financial statements because it focuses specifically on actual cash inflows and outflows during a given period. This provides crucial information about a company's liquidity and cash management, which is not captured in the same way by the income statement or balance sheet. While the income statement may highlight profits, it can include non-cash transactions such as depreciation or accruals, which can obscure the true cash position of the business. Similarly, while the balance sheet provides a snapshot of assets, liabilities, and equity, it does not directly convey how cash moves into or out of the business. By detailing cash movements, the statement of cash flows helps stakeholders assess the company's ability to generate cash and meet its obligations, invest in growth, and support operations.

The other choices do not accurately reflect the specific purpose of the statement of cash flows. For instance, it does not merely indicate profits or summarize equity changes, nor does it provide a comprehensive list of liabilities. Instead, it provides a distinct view of cash dynamics essential for understanding financial health.