A cash flow statement is a compulsory part of financial statements presented in annual general meetings. As per Ind AS -7 we should prepare cash flow statements structure. Activities of cash flow statements are classified in three parts: First is “Operating activities”, Second one is “Investing activities”, and last is “Financial activities” which all are essential for analysis of cash flow statements’ data. In this study, period of study is taken from 2015 - 16 to 2019 - 20 for data analysis and interpretation. It contains two pharmaceutical companies, SUN PHARMA LTD. and DR. REDDY’S LABORATORY LTD. for this study on the basis of highest market capitalization.

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Keywords: Cash Equivalents, Operating Activities, Investing Activities, Financing Activities, Liquidity.