Financial statements all have a goal. The cash flow statement does as well.Requirement1. Describe...

Question

Financial statements all have a goal. The cash flow statement does as well.
Requirement
1. Describe how the statement of cash flows helps investors and creditors perform each of the following functions:
a. Predict future cash flows.
b. Evaluate management decisions.
c. Predict the ability to make debt payments to lenders and to pay dividends to stockholders.

David · Accepted Answer

Cash flow statement provides insight into the financials of the company from the perspective of 
company’s position with respect to cash. It provides from based on three sources of cash flows to 
the company. 
First is cash flow that is generated through running operations of the company. It is net cash flow 
generated by the selling product and services of the company after incorporating al costs. 
Second is cash flow that is invested in the investment project of the company to generate returns 
at a future point of time.

Financial statements all have a goal. The cash flow statement does as well. Requirement 1. Describe how the statement of cash flows helps investors and creditors perform each of the following...

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