Cash Flow Statements:

A cash flow statement isimportant statement for business. It shows the flow of money that come into a company and out of it over a given time period.and in this way a company is able to keep track of how much cash it has on hand to pay expenses and buy assets

Importance of cash flow to the investor

Before investing in any company investor will check the postion of the company whether it is able to pay its debt ,the liquidity ,cash flow i.e. inflow or out flow and so many things . if investor find the position of the company is good then he will invest in the company

From the cash flow statement investoe will find following things

Investor will ensuretimely payment of expenses and debts

He can find out the level of regular business income without relying on outside investment or cash borrowing.

He can monitor company debt

It’s important to know the cash impact that fixed asset investments have, since net income can be significantly affected by depreciation and amortization.

It’s hard to over-emphasize the importance of the cash flow statement. Savvy investors and lenders know the bevy of information available on this crucial report