In a world where most financial statements are done usingaccrual accounting methods it's nice to review the ins and outs ofcash for a company. One of the things I enjoy the most in astatement of cash flows is that you can see how a company primarilyearns its income, for instance a retail company may not beconsidered successful if most of their income doesn't come fromoperations. Additionally, a statement of cash flows shows changesin inventory values. The cash statement also shows income fromfinancing and investing activities which may not be as apparent inthe ornery financial statements.
The question I want to ask is about the negatives of thestatement of cash flows; what are some of the vital informationthat this statement is missing that investorâs need?
In a world where most financial statements are done usingaccrual accounting methods it's nice to review the ins and outs ofcash for a company. One of the things I enjoy the most in astatement of cash flows is that you can see how a company primarilyearns its income, for instance a retail company may not beconsidered successful if most of their income doesn't come fromoperations. Additionally, a statement of cash flows shows changesin inventory values. The cash statement also shows income fromfinancing and investing activities which may not be as apparent inthe ornery financial statements.
The question I want to ask is about the negatives of thestatement of cash flows; what are some of the vital informationthat this statement is missing that investorâs need?
