Usually, a start-up company will Use Funds for the first few years until they build critical mass by building sale and minimizing relative expenses.

The next section is Funds Used for Investment or [Capital Expenditures]. The last section is funds provided by or used in financing operations. Examples of funds used in this section would be paying down debt. Most of all the other items represent cash that has come into the company either by issuing, stock, new debt, or additional paid in capital.

Therefore, you can see from this simple example that all of the decisions made by management are reflected here, which is why it is the most important statement of all the financial statements. The balance sheet is as of a moment in time, the income statement is only half the story. An investment banker said to me when you are out of cash, you are out of business!