In this article we will discuss about the uses and limitations of cash flow statement. Uses of Cash Flow Statement: A Cash Flow Statement is of primary importance to the financial management. It is an essential tool of short-term financial analysis. Its main uses are as follows: 1. Cash Flow Statement facilitates to prepare sound financial policies. It also helps [...]
In this article we will discuss about the preparation of cash flow statement, explained with the help of suitable illustrations. The Cash Flow Statement should report cash flows during the period classified by operating, Investing and Financing Activities. An enterprise presents its cash flows from operating, investing and financing activities in a manner which is most appropriate to its business. [...]
The importance of ratio analysis are:- 1. Aid to Measure General Efficiency 2. Aid to Measure Financial Solvency 4. Facilitate Decision-Making 5. Aid in Corrective Action 6. Aid in Intra Firm Comparison 7. Act as a Good Communication 8. Evaluation of Efficiency 9. Effective Tool 10. Detection of Unfavourable Factors. 1. Aid to Measure General Efficiency: Ratios enable the mass [...]