The importance of the cash flow is as follows;
- It helps depict changes in the cash position of the business
- Necessary to assess the ability of a business entity to generate cash so that it can be used as and when it is needed
- Moreover, it is required to assess the liquidity and solvency position of a business
- it explains the changes in cash and gives the information related to the business operating, investing and financing activities ? The basic objective of cash flow statement is to provide the information to the management about the cash receipts and the cash payments of an organization ? it is used in efficient cash management ? ensure if adequate cash is available to meet the liabilities -Cash flow statement is useful to plan financial operations in an efficient manner.
marto answered the question on February 4, 2019 at 09:19
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