Question

what is on cash flow statement?

Answer 1

The statement of cash flows reports the cash receipts, cash payments, and the net change in cash resulting from the operating, investing, and financing activities of a company during the period. The information in a statement of cash flows should help investors, creditors, and others assess:

The company’s ability to generate future cash flows. By examining relationships between items in the statement of cash flows, investors and others can better predict the amounts, timing, and uncertainty of future cash flows.

The company’s ability to pay dividends and meet obligations. Employees, creditors, stockholders, and customers should be particularly interested in this statement because it alone shows the flows of cash in a business.

The reasons for the difference between net income and net cash provided (used) by operating activities. Many financial statement users investigate the reasons for the difference between net income and cash provided by operating activities and then they can assess for themselves the reliability of the income numbers.

The investing and financing transactions during the period. By examining a company’s investing activities and financing activities, a financial statement readercan better understand why assets and liabilities increased or decreased during the period.