Cash Flow From A Company Essays

835 Words Oct 24th, 2016 4 Pages
Cash is King. It is the lifeblood of any business and knowing where a company stands regarding their cash flow is of utmost importance to an investor or owner. The purpose of the cash flows statement is to provide information on all cash inflows and outflows of a company throughout the year. According to Investopedia, “complementing the balance sheet and income statement, the cash flow statement (CFS) records the amounts of cash and cash equivalents entering and leaving a company. The CFS allows investors to understand how a company 's operations are running, where its money is coming from, and how it is being spent.” The CFS details the cash operations of the company and helps investors, owners and lenders determine if the company has a handle on their cash management. There are three main categories on the of the CFS cash flow on the statement which are cash flow from operating activities, cash flow from financing activities and cash flow from investing activities.
The main objective of the statement of cash flows is to show how much cash a company actually produced during the year. Most shareholders and owners of the company find the cash flow statement as one of the most important financial statements as it assists them in making decisions. Owners and managers are concerned with the cash inflows and outflows of the company to make their decisions.
Stockholders are also interested in the payout of dividends so they are very interested in knowing whether the company is…

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