Answer to Question #134711 in Management for tiya

Question #134711
Cash flow statement is different as it classifies financial information into three major heads which allow the stakeholders in effective decision making. Discuss the broad heads as defined under AS 3 cash flow statement. What can be the potential benefits of preparing a cash flow statement? Elaborate
1
Expert's answer
2020-09-25T15:19:46-0400

The three broad categories of financial information present in a cash flow statement according to AS 3 are operating activities, investing activities, and financing activities. Cash flows originating from operating activities are as a result of main revenue-generating business activities such as cash received from sales and cash paid to suppliers. Cash flows from investing activities, on the other hand, are a representation of outflows made related to business investments for future income in form of investments. Finally, cash flows from financing activities are associated with all transactions related to the size of the business' capital and the debts involved. The primary benefit of a cash flow statement is that it helps businesses to deduce the correct figures of cash inflows and outflows in different business operations. Consequently, the enterprise can compare past cash budgets to present ones to determine future cash requirements.


Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

tiya
26.09.20, 08:21

Thank you so much

Leave a comment

Ask Your question

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS