Cashflow Statement Analysis

In: Business and Management

Submitted By ancian
Words 419
Pages 2
In modern market economy, no matter creditors, stock shares, managers or other information user, focus on the cash flow and the creating cash capacity of enterprise. The statement of cash flow has become one of the main financial statements of every enterprise. Because the statement of cash flow demonstrates the ability of creating net cash flow of enterprises and reveals the liquidity of enterprise’s asset more clearly, helping the users provide object evaluation of overall financial situation. However, a series of simple initial data which statement of cash flow offered still not helpful for decision directly. Therefore, according to the analysis of cash flow statement, which can understand the company’s money flows in, flow out and balance situation, realize the main methods of cash flow out and where enterprises cash flows in. The cash flow statement is intended to provide information on a firm's liquidity or solvency, in order to provide a clear understanding of a company's financial resources at special period. Through the problems found out from financial aspect, promotes the manager understand the operating situation more sufficiently, thus offer the abundant, effective basis for its science decision.
TThe cash flow statement has three sections:Operating, Investing and Finance. The cash flow statement was originally known as the flow funds statement or statement of changes in financial position.
Operating Activities
The operating activities are related to the incoming and outgoing cash that coming from the enterprise’s day-to-day sales of goods and services activities. Generally, this item includes sales revenues, repay debt, pay dividends, etc. The operating activities are the most significant component of cash flow statement. Because it illustrates the ability of making profit at given time based on its current commercial model, to choose whether it is…...

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