Cash flow statement
What is Cash flow statement?Importance of cash flow disceptation & Difference betwixt cash flow disceptation as well as funds flow statement
What is Cash flow statement?Importance of cash flow disceptation & Cash flow disceptation nether straight method,Cash flow disceptation nether indirect method
What is Cash flow statement?Importance of cash flow disceptation & Difference betwixt cash flow disceptation as well as funds flow statement
What is Cash flow statement?Importance of cash flow disceptation & Cash flow disceptation nether straight method,Cash flow disceptation nether indirect method
Introduction
particular period. However, the residuum sail cannot signal why the cash residuum changed. The income disceptation written report revenues, expenses as well as internet income. These items render data most the resources generating capacity as well as profitability, but income disceptation itself cannot tell why cash increased or decreased. Similarly, funds flow disceptation helps to explicate how a trace of piece of job solid acquired its coin as well as how it was spent. But this disceptation fails to render data most the causes of variation inwards cash balance. In other words, trace of piece of job organisation organizations engage inwards dissimilar activities such as operating activities, financing activities as well as investing activities. Therefore, cash flow disceptation is prepared to explicate the cash inflows as well as cash outflows associated alongside operating, financing as well as investing activities of the firm.
Meaning of cash flow statement
The purposes of cash flow disceptation are as below:
i. To render data most the cash inflows as well as cash outflows from operating, financing as well as investing activities of the firm.
ii. To present the impact of the operating, financing as well as investing activities on cash resources
iii. To tell how much cash came inwards during the period, how much cash went out as well as what the internet cash flow was during the period.
iv. To explicate the displace for changes inwards the cash balance.
v. To seat the fiscal needs as well as assist inwards forecasting futurity cash flows
Importance of cash flow statement
The importance of cash flow disceptation is presented as below:
The dissimilar betwixt funds flow disceptation as well as cash flow disceptation is presented as below:
Basis of difference Funds flow statement Cash flow statement
Concept of operating activities
Balance sheet, income disceptation as well as funds flow disceptation are the 3 fiscal statements, which are real closely linked, as well as they play as well as of import role inwards providing fiscal insights into a firm. Influenza A virus subtype H5N1 residuum sail reports the cash residuum at the halt of the period. By examining 2 consecutive residuum sheets, nosotros tin tell whether cash is increased or decreased during a
Meaning of cash flow statement
The cash flow disceptation reports the firm's cash flows during a period, outlining where cash generated from as well as where it was spent. In other words, cash flow disceptation is an indicator of the amount of cash receipts as well as the amount of cash payments or disbursements during a specified period. Opening, financing as well as investing activities are the major trace of piece of job organisation activities that effect inwards either a internet cash inflow or a internet cash outflow. The cash flow disceptation shows the internet increment or decrease inwards cash during a detail fourth dimension menses as well as explains the causes for the changes inwards the cash balance.
Natural of trace of piece of job organisation activities In this way, cash flow disceptation is an of import to the other major fiscal statements. Cash flow disceptation furnishes the of import cash activities of an enterprise. Cash flow disceptation summaries the operating, investing as well as financing activities of a trace of piece of job organisation organization, reports the changes inwards cash over a menses of fourth dimension as well as explains the causes of changes.
Objective of cash flow statementThe purposes of cash flow disceptation are as below:
i. To render data most the cash inflows as well as cash outflows from operating, financing as well as investing activities of the firm.
ii. To present the impact of the operating, financing as well as investing activities on cash resources
iii. To tell how much cash came inwards during the period, how much cash went out as well as what the internet cash flow was during the period.
iv. To explicate the displace for changes inwards the cash balance.
v. To seat the fiscal needs as well as assist inwards forecasting futurity cash flows
Importance of cash flow statement
The importance of cash flow disceptation is presented as below:
i. Cash flow disceptation furnishes the of import cash activities of an enterprise as well as summaries the performance on cash basis. Income disceptation is prepared on accrual basis; therefore, cash flow disceptation is considered a amend indicator of futurity cash inflows as well as outflows than income statement.
ii. Cash flow disceptation discloses the displace of internal fund related alongside operating activities of an enterprise. Therefore, this disceptation is to a greater extent than appropriate for internal fiscal planning, controlling as well as decision-making.
iii. Cash flow disceptation is a critical expose to company's investors as well as creditors. Company's investors as well as creditors focus on cash flow from performance rather than internet income because they attention most the company's mightiness to pay bills rather turn a profit earned.
iv. Cash flow disceptation provides diverse groups of users a valuable starting dot for evaluating the company's fiscal health. These groups pay special attending to the cash flow adequacy ratio as well as cash flow per share, which are based on internet cash generated past times a trace of piece of job solid during a detail menses of time.
v. Cash flow disceptation is useful inwards making internal as good as external investment as well as financing determination such as projection expansion, replacement of projects, repayment brusk term as well as long term debt etc.
Difference betwixt cash flow disceptation as well as funds flow statementThe dissimilar betwixt funds flow disceptation as well as cash flow disceptation is presented as below:
Basis of difference Funds flow statement Cash flow statement
Objectives The objectives of funds flow disceptation are to expose the displace of changes inwards working capital. The objectives of cash flow disceptation are to expose the causes of changes inwards cash as well as cash equivalents.
Basis Fund flow disceptation is based on accrual bases of accounting. Cash flow disceptation is bases on cash basis.
Time range Funds flow disceptation is prepared for the long arrive at fiscal planning. Cash flow disceptation is useful for brusk arrive at fiscal planning.
coverage Funds flow disceptation contains all the components of working capital. Cash flow disceptation is confined to cash as well as cash equivalents exclusively which is only 1 of the components of working capital.
Cash flow from major trace of piece of job organisation activities Business activities are divided into 3 sections i.e. cash flow operating activities, cash flows from investing activities as well as cash flows from financing activities for the operate of preparing cash flow statement. These activities are presented inwards exhibit 2.
Cash flow operating activitiesConcept of operating activities
Operating activities is convened alongside the day-to-day trace of piece of job organisation operations. Cash flow from operating activities is whatever cash transaction related to the firms' operating business, which is responsible for most of the turn a profit earned or loss, suffered. Operating activities ordinarily involve producing as well as delivering expert as well as rendering services. Sales or services revenue is the major rootage of cash inflow nether operating activities. Cost of purchases as well as terms of goods sold, payment of wages, salaries, rent, interest, taxation as well as other expenses are the major sector sector of cash outflow. Cash flow from operations is the major way of generating cash. Cash from operations shows the extent to which day-to-day operating activities have got generated to a greater extent than cash than the cash, which has been used.
The cash flow from operating activities is basically related alongside revenue, cash expenses as well as changes inwards electrical flow assets as well as electrical flow liabilities. The cash inflow as well as natural springtime from this activity has been presented inwards next exhibit 3.
Cash inflow as well as natural springtime nether operating activities
Cash inflow Cash outflow
From trading account Sales revenue service revenue Cost of goods sold, reward as well as manufacturing expenses
From turn a profit & loss account Sundry operating income received such as commission, interest, rent, dividend etc. receive, bad debt recovered Operating expenses (cash items only) such as component expenses, selling expenses, distribution expenses, interest, tax, etc.
From property side of balance Decrease inwards all electrical flow assets except cash & cash equivalents. Increase inwards all electrical flow assets accepts cash as well as cash equivalents.
From liability side of residuum sheet Increase inwards all electrical flow liabilities Deceased inwards all electrical flow liabilities
According to the clause 03 as well as department vi of Nepal accounting criterion (NAS-03 SEC-6). Following items are the examples of cash flows relating to operating activities:
i. Cash receipts from the sales of goods as well as past times rendering services.
ii. Cash receipts from fee, commission, royalties as well as other services.
iii. Cash payment to suppliers for expert as well as provides of services.
iv. Cash paid to employees.
v. Cash receipts as well as cash payments of as well as insurance enterprise for premium as well as claims, announcing as well as other benefits.
vi. Cash payment or refund of income taxes unless they tin endure peculiarly identified alongside financing as well as investing, and
vii. Cash receipts as well as payment from contacts held for dealing or trading purchase.
Cash as well as cash equivalents are non included inwards the cash flow from operating activities. In other words, cash as well as cash equivalents are adjusted at the halt of cash flow disceptation i.e. their opening residuum are added alongside the internet changes inwards cash residuum to decide their ending balance.
Determination of cash from operating activities nether straight method
Net cash flow operating activities tin endure ascertained either past times using straight method or indirect method. Under straight method, cash from operating activities is determined past times deducting all cash expenses from the revenue generated inwards cash. Under indirect method, cash from operating activities is calculated on the footing of internet income, non-operating as well as non-cash items as well as changes inwards electrical flow assets as well as electrical flow liabilities. Both methods are as applicable, however, Nepal accounting criterion emphasis straight method. Accounting to endure clause 03 as well as written report cash flow from operating activities using the straight method.
Cash collection from customers
Cash collection from customers includes the amount of cash sales as well as cash received from customers or credit sales. The sales reported past times income disceptation are the combination of cash as well as credit sales. The cash generated through cash sales cash collection from credited sales is determined alongside the assist of changes inwards the customer's trace of piece of job organisation human relationship of bad debt written residuum sheet. The amount of cash received is likewise affected past times the amount of bad debt written off, bad debt recovered as well as discount allowed to customers. Following points are of import to notation piece calculating cash collection shape customers.
• An increment inwards debtors/accounts receivable/bills receivable trace of piece of job organisation human relationship represents increment inwards credit sales, which reduces cash collection.
• A decrease inwards debtors/account receivable/biils receivable trace of piece of job organisation human relationship represents cash collection from customers.
• An increment inwards provision for doubtful debt as well as provision for discount on debtors increment cash inflow as well as decrease inwards these accounts stand upward for cash outflow.
• Bad debt recovered is a rootage of cash as well as discount allowed to customers is an application of cash.
Cash paid to suppliers
The major expanse of cash natural springtime nether operating activities is the purchases of trade or goods purchase for the operate of selling or manufacturing finished goods. Merchandise tin endure purchase either on cash or on credit. Sundry creditors, pecker payable, accounts payable, suppliers trace of piece of job organisation human relationship etc. are the trace of piece of job organisation human relationship which present the status of credit purchase during a detail menses of time. The purchase or terms of goods sold shown past times income disceptation stand upward for both cash as well as credit purchase as well as cash paid to suppliers is determined alongside the assist of terms of goods sold as well as changes is suppliers trace of piece of job organisation human relationship as well as the seat of inventory of merchandisers. Following points are importance to notation piece calculating cash paid to suppliers for the purchases of merchandise:
• An increment inwards creditors/accounts payable/bills payable trace of piece of job organisation human relationship represents the credit purchase which decreases the cash outflow.
• An increment inwards ivestory represents purchase as well as decrease inwards inventory represents sales of merchandise.
• A decrease inwards creditors/account payable/bills payable trace of piece of job organisation human relationship stand upward for cash paid to suppliers which increment the cash outflow.
• Discount received from suppliers reduces the cash outflow
Cash paid to employees as well as for other expenses
Wages, salaries, rent full general component expenses, selling as well as distribution expenses, depreciation are the event of operating expenses. Out of these expenses, depreciation is non-cash expenses. Income disceptation includes dissimilar types of operating as well as non-operating expenses, but exclusively cash operating expenses are taken into trace of piece of job organisation human relationship piece determining cash paid to employees as well as for other expenses. Different types of operating as well as non-operating expenses expense losses as follows:
Interest payment
Interest on dissimilar types of loan is included either nether operating activities or nether financing activities. In the absence of whatever information, involvement paid is considered as operating expenses as well as should endure included nether the operating department of cash flow statement. However the provision regarding the handling of involvement paid nether Nepal accounting criterion (NAS 03 second 31, 32, 33 as well as 34) are as below:
• Cash flow from involvement as well as dividend should endure disclosed separately. Each should endure classified inwards a consistent trend from menses to period, operating, investing or financing activities.
• The full amount of involvement paid during a menses is disclosed inwards the cash flow disceptation whether it has been recognized as an expense inwards the income disceptation or capitalized.
• Interest paid is ordinarily classified as operating cash flow flow a financing institution. However, in that location is no consensus on the classification for other enterprises. Interest paid may include nether financing activities because involvement paid is a terms of financing.
Tax payment
Tax paid is treated as cash natural springtime operating revenue. The amount of taxation paid is determined on the footing of taxation expense of the electrical flow yr as well as seat of outstanding tax. The method of ascertaining taxation paid is as below:
Interest as well as dividend received
The provision regarding the handling of involvement as well as dividend received has been explained inwards department 31, 32, 33 as well as 34 nether Nepal accounting criterion (NAS-03). Cash flow from involvement as well as dividend received should endure disclosed separately. Each should endure classified inwards a consistent trend from menses to period, operating, investing or financing activities. Interest as well as dividend received are ordinarily classified as operating cash inflow because they larn into into the determination of internet income or loss. Interest as well as dividend received may include nether investing activities because they are treated as homecoming on investment or shares, debentures as well as other assets. Interest as well as dividend is computed as below:
Cash from extra ordinary items
Cash sales as well as cash collection from customers, cash purchase as well as cash paid to suppliers, cash paid to employees as well as for other expenses, involvement as well as dividend received or paid as well as taxation paid are the normal or ordinary items relating alongside the operating activities. Beside these ordinary items, they are another items concerned received alongside the operational cash flow of a trace of piece of job organisation such as brusk term borrowing, compensation received from insurance companies etc. increment inwards the residuum of extra ordinary items is treated as rootage or cash inflow as well as decrease inwards their residuum is considered as cash outflow.
Cash as well as cash equivalent assets
All electrical flow assets as well as electrical flow liabilities are included nether operating activities except cash as well as cash equivalents. Cash as well as cash equivalents include cash inwards hand, cash at banking concern as well as whatever cash invested inwards short-term as well as highly liquid financing instruments. Generally, marketable securities cash as treasury bulls, commercial paper, as well as coin marketplace seat funds are likewise the examples of cash equivalents. If in that location are to a greater extent than than 1 item of cash as well as cash equivalents inwards the residuum sheet, their opening as well as closing residuum is computed as below:
Determination of cash from operating activities nether indirect method
Under indirect method, cash flow from operating activities is determined on the footing of the next information:
• Net income or loss
• Non-cash expenses as well as losses, non-operating expenses, losses as well as amortizations
• Non-operating incomes as well as gain
• Changes inwards electrical flow assets (except cash & equivalents)
• Changes inwards electrical flow liabilities
Cash flow from investing activities
Cash flow from investing activities is the minute component of cash flow statements. Investing activities are related alongside the purchases as well as sales of non-current assets such as constitute as well as machinery, terra firma as well as building, slice of furniture as well as fixture etc. investing activities likewise include lending coin as well as the purchase or sales of investment inwards securities activities explicate the changes inwards cash seat betwixt to residuum sail dates due to the buying or selling of non-current assets. The cash inflows as well as outflows related alongside investing activities tin endure presented as below:
Cash flow from financing activities
The financing activates department of the cash flow disceptation shows the sources of fund generated through owner's majuscule as well as borrowed capital. Financing activities likewise include the repayment of debt as well as payment of cash dividend to shareholders. The major financing activities of a trace of piece of job solid as well as impact of these activities on cash flow flow are presented as below:
Preparation of cash flow statement
Cash flow disceptation is prepared past times combining the cash flows from operating activities investing activities as well as financing as well as financing activities. The primary steps involved inwards the training of cash flow disceptation are presented inwards the following:
Cash flow disceptation nether straight method
Combining the cash flows generated from operating, investing as well as financing activities, cash flow disceptation is prepared to present the internet alter on cash residuum during a detail period. It tin endure prepared according to the straight direct or indirect method; the specimen of cash flow disceptation nether straight method is as below:
Cash flow disceptation nether indirect method
Cash flow disceptation tin endure prepared past times using indirect method also. The deviation betwixt straight method as well as indirect method is exclusively cash flows from operating activities. Cash flow from investing as well as financing activities are similar nether straight as well as indirect methods. The format of cash flow disceptation nether indirect method is as below:
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Cash inflow as well as natural springtime nether operating activities
Cash inflow Cash outflow
From trading account Sales revenue service revenue Cost of goods sold, reward as well as manufacturing expenses
From turn a profit & loss account Sundry operating income received such as commission, interest, rent, dividend etc. receive, bad debt recovered Operating expenses (cash items only) such as component expenses, selling expenses, distribution expenses, interest, tax, etc.
From property side of balance Decrease inwards all electrical flow assets except cash & cash equivalents. Increase inwards all electrical flow assets accepts cash as well as cash equivalents.
From liability side of residuum sheet Increase inwards all electrical flow liabilities Deceased inwards all electrical flow liabilities
According to the clause 03 as well as department vi of Nepal accounting criterion (NAS-03 SEC-6). Following items are the examples of cash flows relating to operating activities:
i. Cash receipts from the sales of goods as well as past times rendering services.
ii. Cash receipts from fee, commission, royalties as well as other services.
iii. Cash payment to suppliers for expert as well as provides of services.
iv. Cash paid to employees.
v. Cash receipts as well as cash payments of as well as insurance enterprise for premium as well as claims, announcing as well as other benefits.
vi. Cash payment or refund of income taxes unless they tin endure peculiarly identified alongside financing as well as investing, and
vii. Cash receipts as well as payment from contacts held for dealing or trading purchase.
Cash as well as cash equivalents are non included inwards the cash flow from operating activities. In other words, cash as well as cash equivalents are adjusted at the halt of cash flow disceptation i.e. their opening residuum are added alongside the internet changes inwards cash residuum to decide their ending balance.
Determination of cash from operating activities nether straight method
Net cash flow operating activities tin endure ascertained either past times using straight method or indirect method. Under straight method, cash from operating activities is determined past times deducting all cash expenses from the revenue generated inwards cash. Under indirect method, cash from operating activities is calculated on the footing of internet income, non-operating as well as non-cash items as well as changes inwards electrical flow assets as well as electrical flow liabilities. Both methods are as applicable, however, Nepal accounting criterion emphasis straight method. Accounting to endure clause 03 as well as written report cash flow from operating activities using the straight method.
Cash collection from customers
Cash collection from customers includes the amount of cash sales as well as cash received from customers or credit sales. The sales reported past times income disceptation are the combination of cash as well as credit sales. The cash generated through cash sales cash collection from credited sales is determined alongside the assist of changes inwards the customer's trace of piece of job organisation human relationship of bad debt written residuum sheet. The amount of cash received is likewise affected past times the amount of bad debt written off, bad debt recovered as well as discount allowed to customers. Following points are of import to notation piece calculating cash collection shape customers.
• An increment inwards debtors/accounts receivable/bills receivable trace of piece of job organisation human relationship represents increment inwards credit sales, which reduces cash collection.
• A decrease inwards debtors/account receivable/biils receivable trace of piece of job organisation human relationship represents cash collection from customers.
• An increment inwards provision for doubtful debt as well as provision for discount on debtors increment cash inflow as well as decrease inwards these accounts stand upward for cash outflow.
• Bad debt recovered is a rootage of cash as well as discount allowed to customers is an application of cash.
Cash paid to suppliers
The major expanse of cash natural springtime nether operating activities is the purchases of trade or goods purchase for the operate of selling or manufacturing finished goods. Merchandise tin endure purchase either on cash or on credit. Sundry creditors, pecker payable, accounts payable, suppliers trace of piece of job organisation human relationship etc. are the trace of piece of job organisation human relationship which present the status of credit purchase during a detail menses of time. The purchase or terms of goods sold shown past times income disceptation stand upward for both cash as well as credit purchase as well as cash paid to suppliers is determined alongside the assist of terms of goods sold as well as changes is suppliers trace of piece of job organisation human relationship as well as the seat of inventory of merchandisers. Following points are importance to notation piece calculating cash paid to suppliers for the purchases of merchandise:
• An increment inwards creditors/accounts payable/bills payable trace of piece of job organisation human relationship represents the credit purchase which decreases the cash outflow.
• An increment inwards ivestory represents purchase as well as decrease inwards inventory represents sales of merchandise.
• A decrease inwards creditors/account payable/bills payable trace of piece of job organisation human relationship stand upward for cash paid to suppliers which increment the cash outflow.
• Discount received from suppliers reduces the cash outflow
Cash paid to employees as well as for other expenses
Wages, salaries, rent full general component expenses, selling as well as distribution expenses, depreciation are the event of operating expenses. Out of these expenses, depreciation is non-cash expenses. Income disceptation includes dissimilar types of operating as well as non-operating expenses, but exclusively cash operating expenses are taken into trace of piece of job organisation human relationship piece determining cash paid to employees as well as for other expenses. Different types of operating as well as non-operating expenses expense losses as follows:
Interest payment
Interest on dissimilar types of loan is included either nether operating activities or nether financing activities. In the absence of whatever information, involvement paid is considered as operating expenses as well as should endure included nether the operating department of cash flow statement. However the provision regarding the handling of involvement paid nether Nepal accounting criterion (NAS 03 second 31, 32, 33 as well as 34) are as below:
• Cash flow from involvement as well as dividend should endure disclosed separately. Each should endure classified inwards a consistent trend from menses to period, operating, investing or financing activities.
• The full amount of involvement paid during a menses is disclosed inwards the cash flow disceptation whether it has been recognized as an expense inwards the income disceptation or capitalized.
• Interest paid is ordinarily classified as operating cash flow flow a financing institution. However, in that location is no consensus on the classification for other enterprises. Interest paid may include nether financing activities because involvement paid is a terms of financing.
Tax payment
Tax paid is treated as cash natural springtime operating revenue. The amount of taxation paid is determined on the footing of taxation expense of the electrical flow yr as well as seat of outstanding tax. The method of ascertaining taxation paid is as below:
Interest as well as dividend received
The provision regarding the handling of involvement as well as dividend received has been explained inwards department 31, 32, 33 as well as 34 nether Nepal accounting criterion (NAS-03). Cash flow from involvement as well as dividend received should endure disclosed separately. Each should endure classified inwards a consistent trend from menses to period, operating, investing or financing activities. Interest as well as dividend received are ordinarily classified as operating cash inflow because they larn into into the determination of internet income or loss. Interest as well as dividend received may include nether investing activities because they are treated as homecoming on investment or shares, debentures as well as other assets. Interest as well as dividend is computed as below:
Cash from extra ordinary items
Cash sales as well as cash collection from customers, cash purchase as well as cash paid to suppliers, cash paid to employees as well as for other expenses, involvement as well as dividend received or paid as well as taxation paid are the normal or ordinary items relating alongside the operating activities. Beside these ordinary items, they are another items concerned received alongside the operational cash flow of a trace of piece of job organisation such as brusk term borrowing, compensation received from insurance companies etc. increment inwards the residuum of extra ordinary items is treated as rootage or cash inflow as well as decrease inwards their residuum is considered as cash outflow.
Cash as well as cash equivalent assets
All electrical flow assets as well as electrical flow liabilities are included nether operating activities except cash as well as cash equivalents. Cash as well as cash equivalents include cash inwards hand, cash at banking concern as well as whatever cash invested inwards short-term as well as highly liquid financing instruments. Generally, marketable securities cash as treasury bulls, commercial paper, as well as coin marketplace seat funds are likewise the examples of cash equivalents. If in that location are to a greater extent than than 1 item of cash as well as cash equivalents inwards the residuum sheet, their opening as well as closing residuum is computed as below:
Determination of cash from operating activities nether indirect method
Under indirect method, cash flow from operating activities is determined on the footing of the next information:
• Net income or loss
• Non-cash expenses as well as losses, non-operating expenses, losses as well as amortizations
• Non-operating incomes as well as gain
• Changes inwards electrical flow assets (except cash & equivalents)
• Changes inwards electrical flow liabilities
Cash flow from investing activities
Cash flow from investing activities is the minute component of cash flow statements. Investing activities are related alongside the purchases as well as sales of non-current assets such as constitute as well as machinery, terra firma as well as building, slice of furniture as well as fixture etc. investing activities likewise include lending coin as well as the purchase or sales of investment inwards securities activities explicate the changes inwards cash seat betwixt to residuum sail dates due to the buying or selling of non-current assets. The cash inflows as well as outflows related alongside investing activities tin endure presented as below:
Cash flow from financing activities
The financing activates department of the cash flow disceptation shows the sources of fund generated through owner's majuscule as well as borrowed capital. Financing activities likewise include the repayment of debt as well as payment of cash dividend to shareholders. The major financing activities of a trace of piece of job solid as well as impact of these activities on cash flow flow are presented as below:
Preparation of cash flow statement
Cash flow disceptation is prepared past times combining the cash flows from operating activities investing activities as well as financing as well as financing activities. The primary steps involved inwards the training of cash flow disceptation are presented inwards the following:
Cash flow disceptation nether straight method
Combining the cash flows generated from operating, investing as well as financing activities, cash flow disceptation is prepared to present the internet alter on cash residuum during a detail period. It tin endure prepared according to the straight direct or indirect method; the specimen of cash flow disceptation nether straight method is as below:
Cash flow disceptation nether indirect method
Cash flow disceptation tin endure prepared past times using indirect method also. The deviation betwixt straight method as well as indirect method is exclusively cash flows from operating activities. Cash flow from investing as well as financing activities are similar nether straight as well as indirect methods. The format of cash flow disceptation nether indirect method is as below:
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The Cash Flow Statement provides valuable insights into a company's liquidity, solvency, and ability to generate cash to meet its financial obligations. It complements other financial statements such as the Income Statement and Balance Sheet, providing a comprehensive view of a company's financial performance and position.
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