Question

Accounting Discussion From your perspective which of the 3 statement of cash flows categories is of...

Accounting Discussion

From your perspective which of the 3 statement of cash flows categories is of most significance? Explain why.

Homework Answers

Answer #1

Out of the Three categories namely Operating Activities, Investing Acivities, Financing Activities in statement of Cash Flow, CASH FLOW FROM OPERATING ACTIVITIES is of most significance.

REASON---

a) Since CASH FLOW FROM OPERATING ACTIVITIES since it provides cash flow informaion related to daily operations of business.

b) This section answers the question " how much cash did we generated from the daily activities of our core business.

c) Owners , creditors, and mangers are most interested in cash flow generated from daily activiies rather than from one time issuance of stock or sale of asset.

d) It allows stakeholders to assess ongoing viability of company.

e) Lenders use the information from this category that how much operating cash company generates so that it can pay his installments.

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