The Statement of Cash Flows is a financial statement showing actual cash movements into and out of a municipality during the reporting period, categorized by operating activities, capital activities, investing activities, and financing activities. Unlike other financial statements that use accrual accounting, the cash flow statement shows when cash actually changed hands. This statement helps users understand whether the municipality generated sufficient cash from operations, how capital investments were funded, and how debt and reserves changed. Analyzing cash flows reveals whether the municipality's cash position improved or declined and whether operating activities generate enough cash to sustain the organization. Municipal financial statements prepared under Public Sector Accounting Standards include cash flow statements.