how do you do number 3 FINANCIAL STATEMENT ANLAYSIS EXAM II 1. (20) One page sin
ID: 2785561 • Letter: H
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how do you do number 3
FINANCIAL STATEMENT ANLAYSIS EXAM II 1. (20) One page single spaced required- Describe and explain the purpose of a Balanoe Sheet and 2. (20) One page single spaced required-Describe and explain the purpose of an Income 3. (20) One page single spaced required- Describe and explain the purpose of a Statement of Cash 4. (40) One page single spaced required on each of the following Explain the purpose and how a manager uses it in a business, provide examples. Statement and how a manager uses it in a business, provide examples Flows and how a manager uses it in a business, provide examples provide examples of the following: Liquidity Ratios Activity Ratios Leverage Ratios Profitability Ratios Please write complete sentences and organized paragraphs and provide in-text citations and references If you have any questions, please let me know.Explanation / Answer
Solution-3: Statement of cash flow provides information about the cash receipts, cash payments and the net change in cash resulting from operating, investing, and financing activities of the Company.
Statement of cash flow helps to understand the liquidity positioning of the Company. It indicates the Company's ability to manage cash and generate the positive cash flows in the future. Positive cash flows can be used for dividend distribution or further investments.
Manager uses Statement of cash flow for day-to-day and strategic decision making by ascertain the cash position of the Company. Positive cash flow indicates surplus cash, available for further investment or expansion. Negative cash flows highlights the Company's inability to fund the business cash requirement. Consider two Companies, Company A and Company B. Both have profits of $1 million but Company A positive cash flows and Company B has negative cash flows. With excess available cash, Company A can expand its business to further increase its profit. However, Company B might not be able to retain its current profitability due to non-availability of the cash to fund its existing business operation.
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