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A the indirect method or b the direct.
Cash flow statement objective. Some of the main objectives of Cash Flow Statement are. During 1960 the cash flow statement was considered with due. The management can find the movement of cash for a specific period.
The primary objective of cash flow statement is to supply the necessary information relating to generation of cash to the users of financial statement. In some countries the preparation cash flow statement is legal requirement. They are operating activities investing activities and financing activities.
Read this article to learn about the top eight objectives of cash flow statement. Inflows of cash and outflows of cash can be measured annually which arise from operating activities investing activities and financial activities. B Generating Inflow of Cash.
Objectives of cash flow statement. The objective of a statement of cash flows is to present financial information about changes in the cash and cash equivalents of an entity during the period. One of the major objectives and benefits of a cash flow statement is to inform the users of financial statements about the cash flows of the company.
While income statements are excellent for showing you how much money youve spent and earned they dont necessarily tell you how much cash you have on hand for a specific period of time. The primary objective of the cash flow statement is to help management in making a decision and making a plan by providing current information on cash inflow and outflow of any accounting period. A cash flow statement is a regular financial statement telling you how much cash you have on hand for a specific period.
Measure the inflow and outflow of cash Helping the management in cash planning for the future. A Measurement of Cash. State the Objective of Preparing the cash Flow Statement.
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