First Class Meaning And Objectives Of Cash Flow Statement
The various uses and importance of cash flow analysis can be briefly explained below.
Meaning and objectives of cash flow statement. Cash flow statements are the third of the core financial reports produced by companies following the income statement and balance sheet. A cash flow statement is a statement of changes in the financial position of a firm on cash basis. The primary objective of the cash flow statement is to help management in making a decision and making a plan by providing current information on cash inflow and outflow of any accounting period.
It reveals the net effects of all business transactions of a firm during a period on cash and explains the reasons of changes in cash position between two balance sheet dates. Meaning of Cash Flow Statement. Opening cash and closing cash for a particular period.
Important Questions on Meaning Objectives And Importance Of Cash Flow Statement is available on Toppr. As per AS-3 Revised the objective of cash flow statement is to provide information about cash flows of an enterprise which is useful in providing the users of financial statements a basis to assess the ability of an enterprise to generate cash and cash equivalents to utilise those cash flows. Cash or cash equivalent.
It is the third component of a companys financial statements. Objectives Of Cash Flow Statement. Meaning Objectives and Importance of Cash Flow Statement Computation of Cash Flow from Operating Investing and Financing Activities.
It is often used in tandem with the other two key reports the Profit and Loss and the Balance Sheet. To determine net changes in cash and cash equivalents. Objectives of cash flow statement.
To provide information about cash inflows and outflows from operating investing and financing activities. In finance the term is used to describe the amount of cash currency that is generated or consumed in a given time period. The Main Objectives Are.