Explain fully the technique of preparing cash flow statement. What are the uses of this statement?
Answers
Answer:
A cash flow statement breaks down the various types of inflows and outflows of cash (and cash equivalents) that a business experiences. It can help you and other stakeholders clearly see how your business earns or spends cash, and it can provide valuable insight into your company financials
Explanation:
A cash flow statement breaks down the various types of inflows and outflows of cash (and cash equivalents) that a business experiences. It can help you and other stakeholders clearly see how your business earns or spends cash, and it can provide valuable insight into your company financials.There are two ways to prepare a cash flow statement: the direct method and the indirect method:
Direct method – Operating cash flows are presented as a list of ingoing and outgoing cash flows. ...
Indirect method – The indirect method presents operating cash flows as a reconciliation from profit to cash flow