%3Cp%3E%22Cash%20is%26nbsp%3Bking%22%26nbsp%3Bis%26nbsp%3Ba%26nbsp%3Bcommon%26nb

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%3Cp%3E%22Cash%20is%26nbsp%3Bking%22%26nbsp%3Bis%26nbsp%3Ba%26nbsp%3Bcommon%26nbsp%3Bterm%26nbsp%3Bin%26nbsp%3Baccounting.%26nbsp%3BAfter%26nbsp%3Blearning%26nbsp%3Babout%26nbsp%3Bthe%26nbsp%3Bmajor%26nbsp%3Btypes%26nbsp%3Bof%26nbsp%3Bfinancial%26nbsp%3Bstatements%2C%26nbsp%3Bwhy%26nbsp%3Bdo%26nbsp%3Byou%26nbsp%3Bbelieve%26nbsp%3Bthat%26nbsp%3Bterm%26nbsp%3Bhas%26nbsp%3Bbecome%26nbsp%3Bcommon%3F%26nbsp%3BWhat%26nbsp%3Bdoes%26nbsp%3Bthis%26nbsp%3Bterm%26nbsp%3Bmeans%26nbsp%3Bto%26nbsp%3Byou%26nbsp%3B%3F%26nbsp%3Band%26nbsp%3Bwhy%3F%26nbsp%3B%3C%2Fp%3E%3Cp%3E%3Cbr%3E%3C%2Fp%3E%3Cp%3EIn%26nbsp%3Blearning%26nbsp%3Bthe%26nbsp%3Bthree%26nbsp%3Bprimary%26nbsp%3Bfianncial%26nbsp%3Bstatements%2C%26nbsp%3BI%26nbsp%3Bthink%26nbsp%3B%22Cash%26nbsp%3Bis%26nbsp%3BKing%22%26nbsp%3Bis%26nbsp%3Ba%26nbsp%3Bcommon%26nbsp%3Bterm%26nbsp%3Bused%26nbsp%3Bbecause%26nbsp%3Beach%26nbsp%3Bfinancial%26nbsp%3Bstatement%26nbsp%3Bcontains%26nbsp%3Bdifferent%26nbsp%3Binformation%26nbsp%3Babout%26nbsp%3Ba%26nbsp%3Bcompany%26nbsp%3Bcash%26nbsp%3Bposition%26nbsp%3Bbut%26nbsp%3Ball%26nbsp%3Brelate%26nbsp%3Bone%26nbsp%3Bway%26nbsp%3Bor%26nbsp%3Banother.%26nbsp%3B%3C%2Fp%3E%3Cp%3E%3Cbr%3E%3C%2Fp%3E%3Cp%3EI'm%26nbsp%3Bnot%26nbsp%3Bsure%26nbsp%3Bif%26nbsp%3BI'm%26nbsp%3Bcorrect%26nbsp%3Bbut%26nbsp%3Bthis%26nbsp%3Bis%26nbsp%3Bwhat%26nbsp%3BI'm%26nbsp%3Bunderstanding.%26nbsp%3BPlease%26nbsp%3Bhelp%26nbsp%3Bbecause%26nbsp%3BI'm%26nbsp%3Bnot%26nbsp%3Bsure%26nbsp%3BI%26nbsp%3Bunderstand%26nbsp%3Bthe%26nbsp%3Breading.%3C%2Fp%3E

Explanation / Answer

Hi,

Please find the answer as follows:

Cash is King is a term used because it is generally believed that if a company is not able to generate enough cash from its business, it may not be able to survive and may not be able to meet its day to day business expenses (it helps in measuring the liquidity of the company). Cash is required for expansion and investment purposes. It is important to note that a cash rich company may not have sufficient profits and vice versa. Therefore, it is important to study all the financial statements in conjuction with each other.

Thanks.

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