Cash Flow Statement and Financial Analysis

Cash Flow Statement and Financial Analysis - Cash Flow...

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Cash Flow Statement and Financial Analysis What it is? It is the in-depth study of movement of cash, i.e. the actual movement of cash in and out of the organization. It aims at projecting the impact of various transactions on the cash position of an organization i.e. the manner in which cash received has been utilized during an accounting year. In other words, it can be defined as a statement which shows the sources of cash receipts and the purposes for which the payment has been made. Cash flow statement analyses the changes in both current and non-current assets to reveal the movement of cash. As per the requirement of Accounting Standard 3, all listed companies are required to prepare a cash flow statement, as a part of annual accounts. Use or Significance : - It is very much useful in evaluating the cash position of the company - Projected cash flow statement for future can be prepared to know the future cash position, helping the firm to plan and coordinate its activities. - Comparison of projected cash flow statement and actual cash flow statement, helps the company to control its activities. - An inter-firm or intra-firm comparison of cash flow statement speaks about the liquidity position of the company, whether improving or deteriorating. Procedure for preparing Cash Flow Statement
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This note was uploaded on 11/15/2011 for the course ACCOUNTS 231 taught by Professor Majidkhan during the Winter '11 term at IIPM.

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Cash Flow Statement and Financial Analysis - Cash Flow...

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