What does a cash flow statement summarize?

A cash flow statement summarizes total income and spending for a given period, providing a comprehensive overview of how money flows in and out of an individual’s or organization’s finances. By detailing both income sources and expenses, it helps to track financial health, assess where money is being spent, and evaluate whether the income covers or exceeds expenditures. This information is crucial for budgeting, financial planning, and making informed decisions about future financial actions.

Other options focus on incomplete aspects of financial reporting. Total expenses alone would not give a full picture of financial health without contextualizing income. Similarly, only presenting income ignores the necessary component of expenses that can affect overall cash flow. Lastly, monthly savings is a narrower focus that does not encompass the breadth of income and expenses captured in a cash flow statement.