What does cash flow from operating activity signify?
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Cash Flow from Operating Activities is Important
Because cash flow indicates the immediate health of a company, cash flow is an important factor that helps determine a company’s ability to pay its current expenses. These expenses include operating expenses such as labor costs and the repayment of debts. As a result, the cash flow statement is an important financial statement for creditors and for individuals interested in evaluating the investment potential of the company.
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