FIN575 University Phoenix Cash Flow Statement Response Discussion RESPOND TO THIS STUDENT IN 50-100 WORDS
Cash flow statement is one of the crucial financial statements for the company. It provides a clear picture of the amount of cash flowing in and out of the business during a given period of time, mainly after a year, as well as the sources of such cash. This disclosure helps in determining if the core business of the company is self-sustainable and with a long term growth potential. Besides the disclosure of the flow of cash in and out of the business, cash flow statement also offers information relating to non-cash investments as well as the businesses’ financing activities(Gibbons, Hisrich & DeSilva, 2015). A proper analysis of the statement of cash flow also provides vital information on the financial condition of the business and is a critical legal requirement as it is imperative for businesses to prepare and present the cash flow statement in conformity to the accounting standards.
“Cash is king” is a common phrase and slang that reflects the belief that cash (money) is the most valuable form of investment tool. The term “cash is king” is often used in analyzing business and investment portfolios and mainly refers to the importance of cash flow, as far as the fiscal health of the business is concerned.
Reference
Gibbons, G., Hisrich, R.D., & DeSilva, C.M. (2015). Entrepreneurial Finance: A Global Perspective (1st ed). Thousand Oaks, CA: SAGE.