Format of Cash Flow Statement Assignment Help

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The importance of Format of Cash Flow Statement

The format of cash flow statement is very important to understand if you are an accounting or finance student. We assure you of Format of Cash Flow Statement Assignment Help in a very easy to understand manner. Let us have a look at what importance this topic hold-

  • Cash flow statement is a type of financial statement that helps in summarizing cash transactions of the business during the financial year. So every finance student must know about it.
  • The format of cash flow statement can be divided into 3 sections which are cash flow from operating activities, the cash flow from investing activities and cash flow from financing activities.
  • Cash flow from operating activities tells about normal business operations like sale and purchase of goods and services.
  • Cash flow from investing activities tells about cash inflows and outflows from the sale and purchase of long-term assets and capital investment decisions.
  • Cash flow from financing activities tells about cash flows related to different aspects related to shareholders and creditors like dividend payments, purchase of treasury stock,
  • It is very important to understand this format to know how cash has moved during the entire accounting period and it helps in assessment of company’s earning, liquidity, solvency and financial performance.
  • Without understanding the format, you won’t be able to solve the numerical problems related to cash flow statements because necessary addition and subtraction of various items are to be done before arriving at the results.

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