wk5 dq2 - involve cash but they reduce the company’s net...

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Discuss how the statement of cash flows is used by investors. If you were an investor reviewing a statement of cash flows, what section would interest you most? Why? Now discuss the circumstances in which other sections of the statement might be important to an investor. Cash flow is one of the most vital dimensions used by investors in valuing a  company. You can see understanding how much a company is really growing (or  not). Cash flow measures the sum of cash that the company brings in and uses  throughout the course of an accounting period (year or quarter) after all fixed  expenses are eliminated.  It is imperative to remember that depreciation and  amortization are non-cash items, they are expenses on paper only and do not 
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Unformatted text preview: involve cash, but they reduce the company’s net income on the books. Me I would be most interested in the cash flow because it is one way measure and evaluating a company, it is important because it focuses on actual operations and eliminates one-time expenses and non-cash charges. But and investor should also review the balance sheet, a nalyzing how the balance sheet changes over time will reveal important information about the company's business trends. You can also monitor the company’s ability to collect revenues, how well they manage their inventory, and even assess their ability to satisfy creditors and stockholders....
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This note was uploaded on 01/27/2010 for the course ACCT 230 taught by Professor Yates during the Winter '09 term at Arizona.

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