ACC 557 Week 9 DQ2
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This 0 page Study Guide was uploaded by an elite notetaker on Wednesday November 11, 2015. The Study Guide belongs to fin571 at Kaplan University taught by in Fall 2015. Since its upload, it has received 24 views.
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Date Created: 11/11/15
ACC 557 Week 9 DQ2 quotUse of Cash Flows Statementsquot Please respond to the following Assess what information may be revealed about the sustainability of a company by review and analysis of a company s statement of cash ows that may not be revealed in the balance sheet or income statement Provide support for your rationale Create an argument indicating that the statement of cash ows contains the most valuable information related to a company s performance for users of financial statement information Provide support for your argument The data that is presented in the statement of cash ows is used to review the company s cash ow items for analysis of the current state of the organization and future growth It is also used to be able to analyze trends with regards to the various cash ow components over different periods of time and their actual relationships with their related income statement items It also allows you to consider the relationships of all cash ow components over distinct periods of time The statement of cash ows helps investors creditors and others assess the company s ability to generate future cash ows with regards to growth potential their ability to be able to pay dividedness and meet all of their financial obligations identify the reasons that there are differences between net income for the company and its net cash ow from operating activities and finally it helps identify the cash and noncash investing and financing transactions that occurred during this particular reporting period Weygandt Kimmel ampKieso 2012 The statement of cash ows contains the most valuable information related to a company s performance for investors creditors and others because it provides additional data that complements the balance sheet and the income statements of the company It allows the interested parties in the company to obtain a better more detailed understanding as to how the company operations are running where they are obtaining their money and how that money is being spent Heakal The cash ow statement is derived from the balance sheet and the income statement The net cash ow from one year to the next should equate to either the increase or decrease of cash between the two consecutive balance sheets which will re ect a true showing of the status of the cash for the company It will provide an investor with a clearer picture of how much cash the company generates and how much of that cash actually comes from its operations Weygandt Kimmel ampKieso 2012 Heakal R nd What is a cash ow statement Retrieved from httpwwwinvestopediacomarticles04033104as
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