What is the purpose of a cash flow analysis?

Answer 1

Cash flow can be:

operational cash flow (the flow of cash for normal operation of the business)

financing cash flow (the flow of cash for financial activities like loans, dividends, stocks, etc.)

investment cash flow (the flow of cash for investments like plant & machinery, land, and other long term capital expenditures)

Answer 2

Cash Flow statement or actual cash flow is basic component for any financial plan as in acrual accounting actual occurance of expense or income is different from actual payment of cash or receipt of cash in future period so unless financial planner doesn't know the actual future cash receipt and payment situation, it is not possible for him to plan accurately

Answer 3

Cash flow analysis is a simple financial analysis that is indispensable to a company. The purpose of the analysis is to determine where money comes from, where it goes, and how to optimize financial resources.

Answer 4

It is often used as a gauge as to how well a business is truly performing. Investors can use the operating cash flow numbers from a business for risk analysis. This is because the cash flow from operations is hard to manipulate.

Answer 5

it is important because it provides that information which is not available in any other financial statement.

Answer 6

The importance of the cash flow budget or report is that it prevents impulse buying. The cash flow budget or report helps to the generation of various ways of cash flow in an organization.

Answer 7

Statement of Cash Flows is usually prepared by your accountant or bookkeepers. Lets take this symptom and dig deeper to find the root of the real question.