Evaluation of a Cash Flow Statement
Posted on Wednesday, September 30, 2009
This was posted in Accounting and Finance
Evaluation of a Cash Flow Statement
A cash flow statement has been considered important both as an analytical tool as well as a planning tool. A cash flow statement helps a financial analyst to answer the following questions:
1. How much of the funds generated by operations have been invested in working capital, how much in repayment of liabilities and how much of it has been reinvested in fixed assets?
2. Was there any sale or purchase of assets or investments of the firm during the year?
3. What are the elements contributing to change in working capital of the firm?
4. Was there any change in non – current assets or liabilities of the firm during the year?
