ACC 230 WEEK 5 DQ 2 - operating activities is also used to...

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Week 5 Discussion Question 2 · Due Date: Day 4 [Main forum] · Post your response to the following: 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.
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Cash flow generated from operating activities is the most important section for the smooth functioning of the company and also payment of cash dividend to the investor. Therefore an investor will be more worried about cash flows from operation, because the cash flow from
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Unformatted text preview: operating activities is also used to determine the free cash flow available to pay off dividend.The free cash flow is calculated by deducting the capital expenditure needed to meet normal growth of business from cash flow from operation. Therefore it can be said that after operating activities, the second important part of cash flow statement form investor’s point of view is the investing activities as the capital expenditure is shown in investing activities section of the statement....
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