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Discuss the following:
- the difference of cash flow statements from balance sheets and net income,
- the importance of cash flows to a business, and
- the failure of a business even when the net income statement is positive.

Post your response. Your response should be a minimum of 150 words and no more than 250 words

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Reid Wolff
Reid WolffLv2
6 Jul 2019

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discussion question you are to discuss why there is a need for the statement of cash flows and how is the statement of cash flows used by companies. Please post your response. Minimum 150 words.

250 Words document

A company’s financial statements consist of the balance sheet,income statement, and statement of cash flows. Choose the financialstatement that you consider most important to a business leader inSaudi Arabia.

Search the internet for an academic or industry-related article.Select an article that relates to your financial statement choiceand why you believe it is the most important for business leadersand investors in Saudi Arabia.

For your discussion post, your first step is to summarize thearticle in two paragraphs describing what you think are the mostimportant points made by the authors (remember to cite theinformation, as appropriate). For the second step, include thereference listing with a hyperlink to the article. Please note, donot copy the article into your post and limit your summary to twoparagraphs. Let me know if you have any questions. Enjoy yoursearch.

Be sure to support your statements with logic and argument,citing all sources referenced. Post your initial response early,and check back often to continue the discussion. Be sure to respondto your peers’ posts as well.

The Statement of Cash flows have become one of the most important financial documents. It is possible to a huge net loss while still generating significant positive cash flows (using depreciation as an example). It is even possible to have billions of dollars in net losses with no effect on the cash position by merely writing off a single item (such as goodwill). It is possible to have a rapidly growing profitable business and become insolvent because one did not manage their cash flow. As it can be seen, the statement of cash flows is extremely important in helping the analyst determine what is happening with corporate finances.

The Statement of cash flows is broken down into three major parts: cash flow from operating activities, cash flow from financing activities and cash flow from investing activities. By carefully studying these documents you can determine the source and use of corporate funds.

Corporations have numerous methods of “manipulating” their books. Some methods are legal some methods are not legal. Based upon your reading in the book, your research on the internet and previous classes please discuss the methods you, as a financial manager could improve gross profit, operating profit and net profit margins.

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