MANAGEMENT

Detailed explanation-1: -While it’s also important to look at business profitability on the income statement, cash flow analysis offers critical information on the financial health of a company. It tells you if cash inflows are coming from sales, loans, or investors, and similar information about outflows.

Detailed explanation-2: -The statement of cash flows provides insight into a firm’s operating, investment, and financing cash flows and reconciles them with changes in its cash and marketable securities during the period of concern.

Detailed explanation-3: -What is a statement of cash flows? A cash flow statement is a financial statement that summarizes the amount of cash flowing into and out of a company. This includes all cash inflows a company receives from its ongoing operations and external investment sources.

Detailed explanation-4: -The cash flow statement provides detailed insights into how a company used its cash during an accounting period. It shows the sources of cash flow and different areas where money was spent, categorized into operations, investing, and financing activities.