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Post a reply to the following discussion post How is the cash flow statement different and what is its purpose? When comparing the statement of
Post a reply to the following discussion post
How is the cash flow statement different and what is its purpose? When comparing the "statement of cash flow" to "balance sheet" and "income statement" the importance of the "cash" portion becomes abundantly clear. Documents like income statements will factor in revenue that has not been collected or expenses that may not have been paid. You could use the balance sheet to track and review changes but the statement of cash flow has that pertinent information readily available for you(AccountingCoach, n.d.). We all know that the more positive the value attached to this document the better. However, it is worth noting that a negative number does not necessarily indicate a failing business. A business that is growing could very well be in the negative and plan for that when it comes to statements of cash(Haekal, 2016).
The 2nd YouTube video had the 3 commonly referred to "cash flows" with operating, investing, and financing. Additionally, the video gave examples of each. References:
AccountingCoach. (n.d.). Cash Flow Statement | Explanation | AccountingCoach. Retrieved fromhttp://www.accountingcoach.com/cash-flow-statement/explanation
Haekal,R. (2016, October 31). What Is A Cash Flow Statement? | Investopedia. Retrieved fromhttp://www.investopedia.com/articles/04/033104.asp
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