Statement Of Cash Flow Statement Essays

762 Words Jul 11th, 2016 4 Pages
Statement of Cash Flows Every investor, creditor, potential partners or third party is interested in how well a business is doing before any money and/ or time is spent on that firm. In order for them to fully understand the financial well-being of a company, they must read a statement of cash flows. A statement of cash flow, is also known as “cash flow statement,” is defined as “a basic financial statement that provides information about cash receipts, cash payments, and the net change in cash resulting from the operating, investing, and financing activities of a company during the period” (Kieso, Weygandt, & Warfield, 2013).
Purpose of the Cash Flow Statement The statement of cash flow was required by the FASB, because the other financial statements did not pertain all the information necessary to provide great judgement on any company. Statements such as the balance sheet and the income statement could only provide financial data to a certain point (Kieso, Weygandt, & Warfield, 2013). The whole purpose of the cash flow statement was to provide useful financial information to those that wish to invest their resources into any firm, users such as creditors and investors. The statement of cash flow was created to show how a business is able to manage their company, and pay their debts, without needing the help of outside sources, rather paying their debts with the revenue earned from regular sales (Kieso, Weygandt, & Warfield, 2013).
Information it provides Since the…

Related Documents