MANAGEMENT

Detailed explanation-1: -When a business acquires a fixed asset, it is recorded on the balance sheet-usually as property, plant and equipment (PP&E). Fixed assets are initially capitalized on a company’s balance sheet, and then periodically depreciated. Depreciation is found on the balance sheet, cash flow statement, and income statement.

Detailed explanation-2: -A Funds Flow Statement thus helps identify liquidity blockage and assists in planning an effective dividend policy. This statement also serves as a financial guide for a company. It brings out the financial issues that a concerned company could face in the near future.

Detailed explanation-3: -The primary aim of financial management is to maximise the shareholders’ wealth by maximising the current price of equity shares of the company.

Detailed explanation-4: -Sales are the main source of inflow of funds into the business as they increase current assets (cash, debtors or bills receivable) but at the same time funds flow out of business for expenses and cost of goods sold.