What is the reporting purpose of the statement of cash flows? Identify at least two questions...

What is the reporting purpose of the statement of cash flows? Identify at least two questions that the statement can answer?

Solutions

Expert Solution

Cash flow statements are prepare to ascertain the cash inflows and outflows during the particular year. The cash flow statemnt are further classified into

cash from operating activity

cash from investing activity

cash from financing activity

CASH FROM OPERATING ACTIVITY includes all those operating cash inflows and outflows.Cash from investing activity includes cash inflows and cash outflows from purchase, sale of fixed assets. Cash from financing activity includes all those inflows and outflows of finance related activity, ie share issue, redemption, dividend etc.

Cash flow statements helps to find out the net cash from all these activity.ie individual cash transactions for the year. It helps to find out changes in cash during a year.

QUESTIONS

1- What is the current status of company after analysing the cash flow statement?

2- What all are items included in each main heads of cash flow statement?

3-Explain the adjustment of dividend in cash flow statement

4-Using the cash flow statement, analysis any two companies financial performance

ekkarill92 answered 1 year ago

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