COMM 293 Study Guide - Cash Flow Statement, Operating Cash Flow, Market Liquidity
Document Summary
Covers a period of time vs. a snapshot (like income and retained earnings statements) Cash is a liquid asset, it can be exchanged easily. Every cash transaction has categorizes into those three categories. Cash is an asset on the balance sheet. Many investors look at the cash flow statements. They state if the cash they earn can finance their regular obligations. Liquidity is a term used to denote whether or not a business is generating cash from its assets or is able to convert its assets into cash quickly. Examples: you sign up a customer for a new cable service and you send them a bill; accounts receivable asset. Cash flows that are directly related to earning income: ex. When retailers pay nestle for the nutrition products sold: when nestle pays salaries or bills received for materials. Directly related to the financing of the company itself.
