Which of these values (Operating, investing, or financing cash flows) are analysts most concerned
with and why?
The analyst is most concerned about the operating section of the cash flow statement. | ||||||||||
As the operating section gives the best information that how the business is running of | ||||||||||
an entity. It shows how much the business is generating cash and paying cash for its day to day activities. | ||||||||||
More the cash from operations better it is for an entity, as than this excess cash can be invested in | ||||||||||
assets or could be used for repayments of long term liabilities. If cash flow from operations is negative | ||||||||||
that means to run the business the management is either using retained earnings or generating | ||||||||||
cash from financing activities. So in order for an entity to grow and sustain in future it needs to have positive | ||||||||||
and higher cash flow from operations. It shows how much net cash it is generating from its business operations | ||||||||||
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