Kassavirrat

Kassavirrat is a financial concept used in Finnish accounting and finance to describe the inflows and outflows of cash and cash equivalents over a specific period. The term is central to liquidity analysis and is summarized in the cash flow statement, which explains how a company’s cash position has changed.

The cash flow statement typically divides cash movements into three activities: operating, investing, and financing. Operating activities reflect cash generated or consumed by core business operations. Investing activities record cash related to the acquisition and disposal of long-term assets and investments. Financing activities cover cash flows from borrowing, issuing equity, and paying dividends, among others.

Two presentation approaches are recognized for Kassavirrat: the direct method, which lists major categories of cash receipts and payments, and the indirect method, which starts from net income and adjusts for non-cash items and changes in working capital. Both methods aim to provide a clear picture of cash movements, though they differ in preparation and detail.

In relation to other financial statements, kassavirrat complements the income statement and balance sheet by highlighting liquidity and the actual cash impact of business activities. It helps assess the ability to meet obligations, fund operations, and finance growth, beyond what profits alone reveal.

Limitations exist, including the exclusion of non-cash transactions and potential sensitivity to seasonal patterns or accounting choices. Nevertheless, kassavirrat remains a key tool in financial analysis, with the term aligning to the Finnish terminology “kassavirrat” or “kassavirtalaskelma,” corresponding to the international cash flow concept.