This week we lettered that companies are required to prepare a statement of gold flows because it acquaints a more accurate walkover of the actual hard cash flow of a eitheriance. Financial statements contrive an overall picture of how much revenue a sept is reporting, but high revenue does not guarantee that the fedeproportionn has the ability to pay its bills. The statement of cash flows is a beam of light designed to help external users make sound scotch decisions rough the company. The statement of cash flows is divided into three circumstancesings: 1) make pass activities, 2) investing activities, and financing activities. The operate activities section proves the companys flow of cash as it relates to a force out loss or net income. It shows the cash that was used or received as it relates to the companys operating activities. The investing activities section analyzes the companys flow of cash from all of its coronation funds activ ities. This usually includes the sales or purchases of property, equipment, and investment securities. The financing activities section analyzes the companys flow of cash from its financing activities. This includes stipendiary bank loans, get from a bank, and any cash that was equanimous from selling bonds or stocks.
While researching for our answers to discussion question two this week, we learned roughly some common ratios used to analyze financial data; Liquidity Ratios, Profitability Ratios, and Solvency Ratios. We also learned which ratios helped determine particularised managerial decision s, each of them. Each ratio used by any co! mpany is just as important as the next. Each ratio plays a part in intracompany comparisons, manufacturing average comparisons, and intercompany comparisons. This week we mat up soft larn about the usefulness of the statement of cash flows. We also felt comfortable with the different classifications of the statement of cash flows: operating, investing, and financing, and how to record each transaction....If you compliments to get a full essay, order it on our website: OrderCustomPaper.com
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