The statement of cash flows provides information on the cash receipts and payments
for a specific period of time.The statement of cash flows reports (1) the cash
effects of a company’s operations during a period, (2) its investing transactions, (3)
its financing transactions, (4) the net increase or decrease in cash during the period,
and (5) the cash amount at the end of the period.
Reporting the sources, uses, and change in cash is useful because investors,
creditors, and others want to know what is happening to a company’s most liquid
resource.The statement of cash flows provides answers to the following simple but
important questions.
1. Where did cash come from during the period?
2. What was cash used for during the period?
3. What was the change in the cash balance during the period?
for a specific period of time.The statement of cash flows reports (1) the cash
effects of a company’s operations during a period, (2) its investing transactions, (3)
its financing transactions, (4) the net increase or decrease in cash during the period,
and (5) the cash amount at the end of the period.
Reporting the sources, uses, and change in cash is useful because investors,
creditors, and others want to know what is happening to a company’s most liquid
resource.The statement of cash flows provides answers to the following simple but
important questions.
1. Where did cash come from during the period?
2. What was cash used for during the period?
3. What was the change in the cash balance during the period?
