Important of cash flow statement analysis for the comparison of two companies (150 words) write in...

Important of cash flow statement analysis for the comparison of two companies (150 words) write in paragraph

Expert Solution

there is a high importance of analysis of cash flow statement for comparison of two companies because it will be providing analysis about the future projection of both the companies and it will also be ascertaining the growth rate associated with these companies in the long run .it will also be helpful in ascertainment of liquidity ratios along with solvency ratios of both the companies and provide with an idea of investment into better company. it will also be providing an idea of comparison of these companies along with the industry standards in order to arrive which company is performing according to the standards of industries or not.Cash flow statements are generally also reflecting the ratio management on the short term cycle and if the company is having adequate cash that means that the company will be having better liquidity.. Dividend paying capability and reinvestment capabilities of both the companies can also be checked.

jeff jeffy answered 2 years ago

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