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Essay / Research Paper Abstract
This 7-page paper focuses on the purpose of a statement of cash flows (cash flow statement) and what it is. Also discussed are cash flow ratios. Bibliography lists 4 sources.
Page Count:
7 pages (~225 words per page)
File: D0_MTcashflst.rtf
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Unformatted sample text from the term paper:
statement and balance sheet - and these provide a good overview of a companys general revenues and expenses. The balance sheet, especially, provides a good indicator of what a company
is worth (assets) and what can take away from its worth (liabilities). However, the investor, analyst or banker that really needs to
know if a company is able to meet short-term and long-term financial obligations needs to know how much cash (liquidity) a company actually has on hand right now. To understand
the solvency of a company, these folks depend on a cash flow statement. In this paper, well cover what a cash flow
statement actually is, and well also discuss cash flow ratios, which provide further information about the financial health of a particular company. STATEMENT OF CASH FLOWS - A DEFINITION
The "official" definition of a statement of cash flows (or a cash flow statement as its sometimes called) is that of a
quarterly financial report filed by a publically traded company to the Securities and Exchange Commission (Cash Flow Statement, 2009). The document itself explains data that a company receives from ongoing
operations and investment sources, as well as outflows that pay for business activities and investments over a defined period of time (typically a quarter) (Cash Flow Statement, 2009).
Reflecting on this further, the accrual accounting method used most by public companies means that income statements released to both investors and the
SEC on a quarterly or annual basis may not reflect accurate changes in the cash position (Cash Flow Statement, 2009). For example, if a company obtains a major contract, it
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