Preview

Cash Flow

Good Essays
Open Document
Open Document
956 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Cash Flow
RUNNING HEAD: CASH FLOW

Cash Flow Week 7/ Assignment Beverly Clarkson December 21, 2014 Daniel Carraher

RUNNING HEAD: CASH FLOW

Cash Flow A statement of cash flows is required by generally accepted accounting principles to be included in a complete set of financial statement. www.wiley.com Companies are required to prepare a statement of cash flow because it contains information for lenders and investors (external users). When a company uses the statement of cash flow it contains their annual reports that help to make decisions about the companies. The basis for cash flow analysis is presented in the statement of cash flow. It contains the actual cash a company generated and it shows how the company is able to operate and perform in the future.
There are three ways a company shows the way they consume and produce cash. The cash flow statement has three sections. The three ways are cash flows from operations, investing and financing. How the company gets its cash is the operations and financing. The investing section shows the way the company spends its cash.
Ratios would be used in the decision making process. One of the examples of the ratios is the operating cash flow ratio. This measures how current liabilities are covered by the cash flow generated by a company operation. A ratio that falls below 1.00 shows the company is not generating enough cash to meet current commitments. When a company falls below 1.00, it will have to find ways to fund its operations or slow their rate of spending in its cash. If the company has an
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    Brandywine Homecare
    • 1320 Words
    • 6 Pages

    Brandywine Homecare

    A cash flow, also known as a cash flow statement simply reports the inflows and outflows of cash in a company.…

    • 1320 Words
    • 6 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Accrual Method Checkpoint Hsm 260
    • 374 Words
    • 2 Pages

    Accrual Method Checkpoint Hsm 260

    The cash flow statement shows every transaction that has occurred as it happens with in the organization. This statement shows the amount of cash coming in and the cash paid out to other services. This cash flow statement shows a breakdown of the organizations financial statement to show what has occurred in a certain amount of time. For example, you can see the income and expenses for either a month or a year. The cash flow statement generally assesses a business’s financial health. This statement can help investors if they are planning to invest in this business, and to…

    • 374 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Financial Statement Review
    • 688 Words
    • 3 Pages

    Financial Statement Review

    The statement of cash flows statements reports over a period of time and covers cash inflows and outflows. Generally the statement of cash flows refers to the day to day operations or operating cash flows, cash from investing and cash from financing. It is difficult for a company to manipulate the cash flow and therefore is a very important financial statement.…

    • 688 Words
    • 3 Pages
    Good Essays
    Read More
  • Better Essays

    (Wal-Mart) Global Environments
    • 2438 Words
    • 10 Pages

    (Wal-Mart) Global Environments

    The statement of cash flow defines the financial activities during a reporting period for a company. The cash flow statement will define the interest, sale of debt or securities or the purchase of debt or securities with the exception of investments and financing activities that do not require the use of cash.…

    • 2438 Words
    • 10 Pages
    Better Essays
    Read More
  • Good Essays

    Cash Flows
    • 780 Words
    • 4 Pages

    Cash Flows

    The cash flow statement reports a company’s inflow and outflow of cash. While an income statement provides the information about whether or not a company made a profit, a cash flow statement can tell you whether the company generated cash. The cash flow statement also provides information regarding investing and financing activities that do not require the consumption of cash. All of these aspects are important for a company management to monitor because they all have such a strong effect on the financial health of the company. The examination of the cash flow statement should be a high priority for potential investors; the amount of money that flows in and out of a company is something that investors might want to monitor.…

    • 780 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Statement of Cash Flows
    • 725 Words
    • 3 Pages

    Statement of Cash Flows

    In financial accounting, a cash flow statement or statement of cash flows is a financial statement that shows a company's incoming and outgoing money (sources and uses of cash) during a time period (often monthly or quarterly and also yearly). The statement shows how changes in balance sheet and income accounts affected cash and cash equivalents, and breaks the analysis down according to operating, investing, and financing activities.…

    • 725 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Direct and Indirect Cash Flows
    • 350 Words
    • 2 Pages

    Direct and Indirect Cash Flows

    A direct statement of cash flow reports a company 's sources and use of cash. The statement has three sections that report cash receipts and cash payments; operating, investing and financing activities. Operating activities include receipts and payments from normal business operations while investing activities include the purchase or sale of long-term asset and investments. Financing activities relate to making payments to creditors and investors.…

    • 350 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Statement of Cash Flows
    • 726 Words
    • 3 Pages

    Statement of Cash Flows

    The statement of cash flows serves multiple purposes. One is providing information about a company’s cash payments and receipts during a given period. A second purpose is to provide cash-basis information about the company’s operating, financing, and investing activities. Its format reconciles the beginning and ending cash balances for the period (Kieso, Weygandt & Warfield, 2007). The operating activities involve the cash effects of transactions that enter into the determination of net income, such as cash payments to employers and suppliers for acquisitions of expenses and inventory and also, the cash receipts from sales of goods or services.…

    • 726 Words
    • 3 Pages
    Good Essays
    Read More
  • Better Essays

    Cash Flows
    • 958 Words
    • 9 Pages

    Cash Flows

    Classify each of the following transactions as arising from an operating (O), investing (I), financing (F), or noncash investing/financing (N) activity.…

    • 958 Words
    • 9 Pages
    Better Essays
    Read More
  • Better Essays

    Cash Flow Analysis Paper
    • 935 Words
    • 4 Pages

    Cash Flow Analysis Paper

    Because some people are unaware of their financial outlook, creating a cash flow statement will provide the structure needed, thus providing information such as where the money is going and how much is remaining at the end of the month. A plus to developing a cash flow statement is the ability to analyze the fixed expenses with the income and savings and modify as needed.…

    • 935 Words
    • 4 Pages
    Better Essays
    Read More
  • Good Essays

    Cash Flow: Direct and Indirect Presentations
    • 265 Words
    • 2 Pages

    Cash Flow: Direct and Indirect Presentations

    The differences between direct and indirect that they involve the way Cash Flow are from operations of activities. This I do recall is the first part of the Cash Flow Statement. The differences are to each are to follow.…

    • 265 Words
    • 2 Pages
    Good Essays
    Read More
  • Good Essays

    Explain The Four Basic Financial Statements
    • 297 Words
    • 2 Pages

    Explain The Four Basic Financial Statements

    There are four basic financial statements that companies use. They begin with income statement, statement of owner’s equity, balance sheet, and the statement of cash flows. Company’s use income statements to report how much money they have made and how much they have spent over a specified period of time. The statement of owner’s equity is used to report any changes in equity from a company’s net income or net loss, as well as report changes in the owner’s investments and withdrawals over a specified period of time. The balance sheet is used to report a company’s financial position at any point in time. This statement includes information such as what types of assets and their amounts, liabilities, and equity. The statement of cash flows is…

    • 297 Words
    • 2 Pages
    Good Essays
    Read More
  • Powerful Essays

    Manage Financial Operation of Sushi Bar
    • 1729 Words
    • 7 Pages

    Manage Financial Operation of Sushi Bar

    Cash flow statement: It’s a financial statement that shows how change in balance sheet and income accounts affect cash. It’s useful in determining the short-term viability of a company,…

    • 1729 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Good Essays

    Uses of Financial Statements
    • 539 Words
    • 3 Pages

    Uses of Financial Statements

    The statement of cash flows reports the sources of a company’s cash inflow and the uses of a company’s cash over a period of time.…

    • 539 Words
    • 3 Pages
    Good Essays
    Read More
  • Powerful Essays

    cash flow
    • 3387 Words
    • 14 Pages

    cash flow

    This essay is about the funding process, organization, and expenses of the NHS in England (Harker, 2012). Bridean (2004) described money flow as the extent at which money flows into in an organisation, usually made from effective spending and financing activities. The components of cash flow must be evident on a planner so that it will be understood easily on how it occurred exactly. According to Donaldson & Gerard (2005), he stated that if cash is not observed carefully, the return which might have been planned might not be recognized by the organisation. So therefore, one needs to have the facts of how cash flows and integrate it into the organization. Also, measures can be taken to prevent incidents that might run the organisation into debt and disappointment.…

    • 3387 Words
    • 14 Pages
    Powerful Essays
    Read More