FIN 300 Chapter Notes - Chapter 3: Reserve Requirement, Current Liability, Quick Ratio
Document Summary
A good working knowledge of nancial statements is desirable simply such statements, and numbers derived from those statements, are the primary means of communicating. Nancial information within the rm and outside the rm. Cash flow and financial statements : a closer look. At the most fundamental level, rms do two different things: they generate cash and they spend it, and the cash is generated by selling a product, an asset, or a security. Cash ow from assets = cash ow to creditors + cash ow to owners. This cash ow identity summarizes the total cash result of all the transactions the rm engaged in during the year. Sources of cash: the activities that bring in cash. Uses of cash: those activities that involve spending cash. What we need to do is trace the changes in the rms statement of nancial position to see how he rm obtained its cash and how the r spent its cash during some time period.
