What does a cash flow statement typically indicate?

A cash flow statement is a financial document that summarizes the amount of cash and cash equivalents entering and leaving a business over a specific period. The primary focus of this statement is to provide insight into the cash inflows (money coming in) and cash outflows (money going out) of a business.

This information is crucial for understanding how well a business can manage its cash flow, pay its bills, and fund its operations. A positive cash flow indicates that a company is generating more cash than it is spending, which can be vital for both growth and sustainability. Conversely, negative cash flow may suggest difficulties in meeting obligations or investing in opportunities.

The other choices do not accurately reflect the purpose of a cash flow statement. While total revenue generated can be a part of the cash inflow, it does not encompass the broader picture of cash movement. The number of employees hired and marketing expenses pertain more to operational and expense aspects of the business, respectively, but are not directly related to cash flow. Thus, the correct answer highlights the essential role of the cash flow statement in tracking financial health related to actual cash transactions.