Question

ACC II - Cash Flow Statement week 5

What does a Cash Flow statement offer a company that the Balance Sheet, Income Statement and Retained Earning Statement can not?

Answer 1

A balance sheet, or statement of financial position, is a rundown of the financial balances of an organization, while a cash flow statement, or statement of cash flows, indicates how the adjustments in balance sheet records and wage on the wage statement influence an organization’s cash position. Fundamentally, an organization’s cash flow statement measures the flow of cash all through a business, while an organization’s balance sheet measures its advantages, liabilities and proprietors' value. The cash flow statement is separated into three sections: working exercises, financing exercises and contributing exercises.

An organization's working exercises are involved the income creating exercises of a business, for example, cash got from clients; cost of goods sold (COGs); compensation and wages; lease; and office costs. An organization's financing exercises are contained exercises that change the value or borrowings of an organization, for example, profit installments, share repurchases and the offer of offers. An organization's contributing exercises are contained installments made for long haul resources, cash got for the offer of long haul resources and the offer of securities issued by different organizations.

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