Glory State The Primary Objective Of Preparing A Cash Flow Statement
H Helps the Management to Ascertain Cash Planning.
State the primary objective of preparing a cash flow statement. In this lesson you will learn about the fourth and final report - the statement of cash flows. The Primary Objective of Preparing Cash Flow Statement is to find out the Inflows and Outflows of Cash and Cash Equivalents from Operating Investing and Financing Activities. Generally a cash flow statement is prepared for a particular period or a financial year.
The inflows and outflows of cash can be represented with the help of this statement. About the operating investing and financing activities of an entity during a period. The statement of cash flows is one of three financial statements that a business has to prepare at the end of each accounting period.
Iv To ascertain the cash and cash equivalent at the end of the period. Iii To see the cash generation ability of a firm. The objective of preparing Cash Flow Statement is to determine the sources receipts and the application payments of cash and cash equivalents under different activities ie peratinginvestingfinancing activity Concept.
The following are some of the objectives of cash flow statemen t. The management can find the movement of cash for a specific period. The primary objective of cash flow statement is to provide useful information about cash flows inflows and outflows of an enterprise during a particular.
That is useful in assessing cash flow prospects. The CFS can help determine whether a company has enough liquidity or cash to. The purpose of the cash flow statement or statement of cash flows or SCF is to identify the major cash flows occurring during the same period of time as the companys income statement and between the related balance sheets.
What is meant byCash Flow Statement. The primary objective of preparing Cash Flow Statement is to provide useful information about cash inflows and outflows of an enterprise during a particular period. The purpose of the statement of cash flows is to present cash inflows and outflows for a reporting period to the reader of the report.