RSM219H1 Chapter Notes - Chapter 5: Cash Cash, Issued Shares, Business Valuation
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RSM219H1 Full Course Notes
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Document Summary
Chapter 5 the statement of cash flows. Many users consider it to be the most important financial statement in determining a company"s future prospects. Creditors want to be able to assess a company"s ability to generate sufficient cash to service its debts (to pay interest and repay the principal as it comes due) Creditors and outside users need some way to assess an organization"s cash flows and predict its future cash position. This statement provides this perspective on an organization"s performance by summarizing its cash inflows and outflows and highlighting the activities that resulted in the net change in its cash position during the period. Assess the company"s ability to generate cash flows from its core operations. Evaluate the cash flows the company has been able to obtain from investors (through the issuance of new shares) and creditors (through new borrowings) Assess the extent to which the company has invested cash to replace or add revenue-generating assets, such as ppe.
