Question

In most cases a paragraph or so for each question will be sufficient. For problems, show...

In most cases a paragraph or so for each question will be sufficient. For problems, show your work such as calculator inputs and outputs for full credit.

1. How do financial cash flows and the accounting statement of cash flows differ? Which is more useful for analyzing a company?

Homework Answers

Answer #1

1. Financial cash flows will be reflecting all such cash flows which are related to all the the financial related cash flows and it will not include cash flows which are non operating in nature like interest cost and depreciation so it will be not including these non operating kinds of cost because they feel that these costs are not reflecting the true value of cash flows in books of financial account

accounting cash flows will be including all such cost which are related to operations of the companies like interest cost and depreciation as well to arrive at the cash flows at the end so financial cash flows are more oriented towards finding out the actual impact of these cash flows on the financial statements whereas accounting cash flows are focused at finding out the effect of these cash flows on the overall business of the company

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