SlideShare a Scribd company logo
1 of 2
S12-1
(Learning Objective 1: Explain the purposes of the statement of cash flows) State how the
statement of cash flows helps investors and creditors perform each of the following functions:
a. Predict future cash flows
Solution
answer..
purpose od cash flow statments...The purpose of the cash flow statement or statement of cash
flows is to provide information about a company's gross receipts and gross payments for a
specified period of time.
The gross receipts and gross payments will be reported in the cash flow statement according to
one of the following classifications: operating activities, investing activities, and financing
activities. The net change from these three classifications should equal the change in a
company's cash and cash equivalents during the reporting period. For instance, the cash flow
statement for the calendar year 2013 will report the causes of the change in a company's cash
and cash equivalents between its balance sheets of December 31, 2012 and December 31, 2013.
The statement of cash flow's primary purpose is to provide information regarding a company's
cash receipts and cash payments. The statement complements the income statement and balance
sheet. When credit decisions are made, many factors must be assessed. The income statement
and balance sheet provide information about some of these factors, the cash flow statement
provides information about the other factors. and through these data invester can anlysis the
company position ..........
Over the life of a company, total net income and net cash inflow will equal. However, since
income determination is based on accrual accounting, income and cash flow will rarely equal in
an annual accounting period.
S12-1 (Learning Objective 1- Explain the purposes of the statement of.docx

More Related Content

Similar to S12-1 (Learning Objective 1- Explain the purposes of the statement of.docx

Topic 3 interim_financial_reporting
Topic 3 interim_financial_reportingTopic 3 interim_financial_reporting
Topic 3 interim_financial_reporting
kim rae KI
 
Describe financial statement analysis
Describe financial statement analysisDescribe financial statement analysis
Describe financial statement analysis
minakshi1987
 
21Analyzing FinancialStatementsChapter Twenty-OneA.docx
21Analyzing FinancialStatementsChapter Twenty-OneA.docx21Analyzing FinancialStatementsChapter Twenty-OneA.docx
21Analyzing FinancialStatementsChapter Twenty-OneA.docx
vickeryr87
 
Ratio Analysis of Apex Adelchi Footwear Ltd
Ratio Analysis of Apex Adelchi Footwear LtdRatio Analysis of Apex Adelchi Footwear Ltd
Ratio Analysis of Apex Adelchi Footwear Ltd
Moin Sarker
 
financial statement's analysis
financial statement's analysisfinancial statement's analysis
financial statement's analysis
dharmrao
 
Ratio analysis vijay textiles
Ratio analysis vijay textilesRatio analysis vijay textiles
Ratio analysis vijay textiles
Dipesh Bhalavat
 
Chapter 14 THE STATEMENT OF CASH FLOWS.ppt
Chapter 14  THE STATEMENT OF CASH FLOWS.pptChapter 14  THE STATEMENT OF CASH FLOWS.ppt
Chapter 14 THE STATEMENT OF CASH FLOWS.ppt
JemalSeid25
 
Scanned by CamScannerChapter 6Understanding Cash Flo.docx
Scanned by CamScannerChapter 6Understanding Cash Flo.docxScanned by CamScannerChapter 6Understanding Cash Flo.docx
Scanned by CamScannerChapter 6Understanding Cash Flo.docx
anhlodge
 
Managing A Firm Based On Past Oriented Financial Statements
Managing A Firm Based On Past Oriented Financial StatementsManaging A Firm Based On Past Oriented Financial Statements
Managing A Firm Based On Past Oriented Financial Statements
Beth Hernandez
 
Accounting Lessons Day 2--Finalized
Accounting Lessons Day 2--FinalizedAccounting Lessons Day 2--Finalized
Accounting Lessons Day 2--Finalized
Barre Arale Mohamud
 

Similar to S12-1 (Learning Objective 1- Explain the purposes of the statement of.docx (20)

Financial analysis and management
Financial analysis and managementFinancial analysis and management
Financial analysis and management
 
Financial statements
Financial statementsFinancial statements
Financial statements
 
Sm chapter 02
Sm chapter 02Sm chapter 02
Sm chapter 02
 
Mf0015 assignment
Mf0015 assignmentMf0015 assignment
Mf0015 assignment
 
Topic 3 interim_financial_reporting
Topic 3 interim_financial_reportingTopic 3 interim_financial_reporting
Topic 3 interim_financial_reporting
 
Describe financial statement analysis
Describe financial statement analysisDescribe financial statement analysis
Describe financial statement analysis
 
CT 1 NOTES FOR ACTUARIAL SCIENCE BY SOURAV SIR'S CLASSES 9836793076
CT 1 NOTES FOR ACTUARIAL SCIENCE BY SOURAV SIR'S CLASSES   9836793076 CT 1 NOTES FOR ACTUARIAL SCIENCE BY SOURAV SIR'S CLASSES   9836793076
CT 1 NOTES FOR ACTUARIAL SCIENCE BY SOURAV SIR'S CLASSES 9836793076
 
21Analyzing FinancialStatementsChapter Twenty-OneA.docx
21Analyzing FinancialStatementsChapter Twenty-OneA.docx21Analyzing FinancialStatementsChapter Twenty-OneA.docx
21Analyzing FinancialStatementsChapter Twenty-OneA.docx
 
Analysis
AnalysisAnalysis
Analysis
 
Ratio Analysis of Apex Adelchi Footwear Ltd
Ratio Analysis of Apex Adelchi Footwear LtdRatio Analysis of Apex Adelchi Footwear Ltd
Ratio Analysis of Apex Adelchi Footwear Ltd
 
financial statement's analysis
financial statement's analysisfinancial statement's analysis
financial statement's analysis
 
Financial accounting icab chapter 3 cash flow statements
Financial accounting icab chapter 3 cash flow statementsFinancial accounting icab chapter 3 cash flow statements
Financial accounting icab chapter 3 cash flow statements
 
Ratio analysis vijay textiles
Ratio analysis vijay textilesRatio analysis vijay textiles
Ratio analysis vijay textiles
 
Assignment accounts
Assignment  accountsAssignment  accounts
Assignment accounts
 
Chapter 14 THE STATEMENT OF CASH FLOWS.ppt
Chapter 14  THE STATEMENT OF CASH FLOWS.pptChapter 14  THE STATEMENT OF CASH FLOWS.ppt
Chapter 14 THE STATEMENT OF CASH FLOWS.ppt
 
Scanned by CamScannerChapter 6Understanding Cash Flo.docx
Scanned by CamScannerChapter 6Understanding Cash Flo.docxScanned by CamScannerChapter 6Understanding Cash Flo.docx
Scanned by CamScannerChapter 6Understanding Cash Flo.docx
 
ch01 (1).ppt
ch01 (1).pptch01 (1).ppt
ch01 (1).ppt
 
Fa assingment ii
Fa assingment iiFa assingment ii
Fa assingment ii
 
Managing A Firm Based On Past Oriented Financial Statements
Managing A Firm Based On Past Oriented Financial StatementsManaging A Firm Based On Past Oriented Financial Statements
Managing A Firm Based On Past Oriented Financial Statements
 
Accounting Lessons Day 2--Finalized
Accounting Lessons Day 2--FinalizedAccounting Lessons Day 2--Finalized
Accounting Lessons Day 2--Finalized
 

More from mtruman1

Visual Studio Short Answer- 1- What is the name of the tool that lets.docx
Visual Studio Short Answer- 1- What is the name of the tool that lets.docxVisual Studio Short Answer- 1- What is the name of the tool that lets.docx
Visual Studio Short Answer- 1- What is the name of the tool that lets.docx
mtruman1
 
Visit two or more social media sites and review information that peopl.docx
Visit two or more social media sites and review information that peopl.docxVisit two or more social media sites and review information that peopl.docx
Visit two or more social media sites and review information that peopl.docx
mtruman1
 
Visual Basic Short Answer- 1- What is the primary advantage to definin.docx
Visual Basic Short Answer- 1- What is the primary advantage to definin.docxVisual Basic Short Answer- 1- What is the primary advantage to definin.docx
Visual Basic Short Answer- 1- What is the primary advantage to definin.docx
mtruman1
 
Virtual Computing Questions-- Answer both questions in 500-600 words W.docx
Virtual Computing Questions-- Answer both questions in 500-600 words W.docxVirtual Computing Questions-- Answer both questions in 500-600 words W.docx
Virtual Computing Questions-- Answer both questions in 500-600 words W.docx
mtruman1
 
Virtual Computing Question-- Answer the following question that listed.docx
Virtual Computing Question-- Answer the following question that listed.docxVirtual Computing Question-- Answer the following question that listed.docx
Virtual Computing Question-- Answer the following question that listed.docx
mtruman1
 
Ventura Capital is a financier who specializes in capitalizing start-u (1).docx
Ventura Capital is a financier who specializes in capitalizing start-u (1).docxVentura Capital is a financier who specializes in capitalizing start-u (1).docx
Ventura Capital is a financier who specializes in capitalizing start-u (1).docx
mtruman1
 
Week 4 - HIDS or AntiVirus Systems Research Paper The focus of the res (1).docx
Week 4 - HIDS or AntiVirus Systems Research Paper The focus of the res (1).docxWeek 4 - HIDS or AntiVirus Systems Research Paper The focus of the res (1).docx
Week 4 - HIDS or AntiVirus Systems Research Paper The focus of the res (1).docx
mtruman1
 
Week 2 Discussion- I need help understanding the following question- C.docx
Week 2 Discussion- I need help understanding the following question- C.docxWeek 2 Discussion- I need help understanding the following question- C.docx
Week 2 Discussion- I need help understanding the following question- C.docx
mtruman1
 
We will assume the universe is expanding at a constant rate- At t - t0.docx
We will assume the universe is expanding at a constant rate- At t - t0.docxWe will assume the universe is expanding at a constant rate- At t - t0.docx
We will assume the universe is expanding at a constant rate- At t - t0.docx
mtruman1
 
We normally think of the arts as very different from technologies in s.docx
We normally think of the arts as very different from technologies in s.docxWe normally think of the arts as very different from technologies in s.docx
We normally think of the arts as very different from technologies in s.docx
mtruman1
 
We discussed how the processor routes data between internal components.docx
We discussed how the processor routes data between internal components.docxWe discussed how the processor routes data between internal components.docx
We discussed how the processor routes data between internal components.docx
mtruman1
 
We normally think of the arts as very different from technologies in s (1).docx
We normally think of the arts as very different from technologies in s (1).docxWe normally think of the arts as very different from technologies in s (1).docx
We normally think of the arts as very different from technologies in s (1).docx
mtruman1
 

More from mtruman1 (20)

Wages and salaries incurred in March amounted to $10-000- of which $4-.docx
Wages and salaries incurred in March amounted to $10-000- of which $4-.docxWages and salaries incurred in March amounted to $10-000- of which $4-.docx
Wages and salaries incurred in March amounted to $10-000- of which $4-.docx
 
Visual Studio Short Answer- 1- What is the name of the tool that lets.docx
Visual Studio Short Answer- 1- What is the name of the tool that lets.docxVisual Studio Short Answer- 1- What is the name of the tool that lets.docx
Visual Studio Short Answer- 1- What is the name of the tool that lets.docx
 
Visit two or more social media sites and review information that peopl.docx
Visit two or more social media sites and review information that peopl.docxVisit two or more social media sites and review information that peopl.docx
Visit two or more social media sites and review information that peopl.docx
 
Visual Basic Short Answer- 1- What is the primary advantage to definin.docx
Visual Basic Short Answer- 1- What is the primary advantage to definin.docxVisual Basic Short Answer- 1- What is the primary advantage to definin.docx
Visual Basic Short Answer- 1- What is the primary advantage to definin.docx
 
Vanadium is a transition metal that can be found in the four consecuti.docx
Vanadium is a transition metal that can be found in the four consecuti.docxVanadium is a transition metal that can be found in the four consecuti.docx
Vanadium is a transition metal that can be found in the four consecuti.docx
 
Virtual Computing Questions-- Answer both questions in 500-600 words W.docx
Virtual Computing Questions-- Answer both questions in 500-600 words W.docxVirtual Computing Questions-- Answer both questions in 500-600 words W.docx
Virtual Computing Questions-- Answer both questions in 500-600 words W.docx
 
VB Create a Class named file that contains the following properties- I.docx
VB Create a Class named file that contains the following properties- I.docxVB Create a Class named file that contains the following properties- I.docx
VB Create a Class named file that contains the following properties- I.docx
 
Virtual Computing Question-- Answer the following question that listed.docx
Virtual Computing Question-- Answer the following question that listed.docxVirtual Computing Question-- Answer the following question that listed.docx
Virtual Computing Question-- Answer the following question that listed.docx
 
Ventura Capital is a financier who specializes in capitalizing start-u (1).docx
Ventura Capital is a financier who specializes in capitalizing start-u (1).docxVentura Capital is a financier who specializes in capitalizing start-u (1).docx
Ventura Capital is a financier who specializes in capitalizing start-u (1).docx
 
VB -What is the primary advantage to defining an interface type in an.docx
VB -What is the primary advantage to defining an interface type in an.docxVB -What is the primary advantage to defining an interface type in an.docx
VB -What is the primary advantage to defining an interface type in an.docx
 
Valence electrons are not responsible for A- B- O D- The chemical reac.docx
Valence electrons are not responsible for A- B- O D- The chemical reac.docxValence electrons are not responsible for A- B- O D- The chemical reac.docx
Valence electrons are not responsible for A- B- O D- The chemical reac.docx
 
Vertically polarized light that has an intensity of 200 W-m2 is incide.docx
Vertically polarized light that has an intensity of 200 W-m2 is incide.docxVertically polarized light that has an intensity of 200 W-m2 is incide.docx
Vertically polarized light that has an intensity of 200 W-m2 is incide.docx
 
Week 4 - HIDS or AntiVirus Systems Research Paper The focus of the res (1).docx
Week 4 - HIDS or AntiVirus Systems Research Paper The focus of the res (1).docxWeek 4 - HIDS or AntiVirus Systems Research Paper The focus of the res (1).docx
Week 4 - HIDS or AntiVirus Systems Research Paper The focus of the res (1).docx
 
Week 2 Discussion- I need help understanding the following question- C.docx
Week 2 Discussion- I need help understanding the following question- C.docxWeek 2 Discussion- I need help understanding the following question- C.docx
Week 2 Discussion- I need help understanding the following question- C.docx
 
We will assume the universe is expanding at a constant rate- At t - t0.docx
We will assume the universe is expanding at a constant rate- At t - t0.docxWe will assume the universe is expanding at a constant rate- At t - t0.docx
We will assume the universe is expanding at a constant rate- At t - t0.docx
 
We normally think of the arts as very different from technologies in s.docx
We normally think of the arts as very different from technologies in s.docxWe normally think of the arts as very different from technologies in s.docx
We normally think of the arts as very different from technologies in s.docx
 
We discussed how the processor routes data between internal components.docx
We discussed how the processor routes data between internal components.docxWe discussed how the processor routes data between internal components.docx
We discussed how the processor routes data between internal components.docx
 
We normally think of the arts as very different from technologies in s (1).docx
We normally think of the arts as very different from technologies in s (1).docxWe normally think of the arts as very different from technologies in s (1).docx
We normally think of the arts as very different from technologies in s (1).docx
 
We reproduce the class Money here- in part- class Money{ public- Mone.docx
We reproduce the class Money here- in part- class Money{ public-  Mone.docxWe reproduce the class Money here- in part- class Money{ public-  Mone.docx
We reproduce the class Money here- in part- class Money{ public- Mone.docx
 
We have two oscillators- used to measure time- One is a vertical mass-.docx
We have two oscillators- used to measure time- One is a vertical mass-.docxWe have two oscillators- used to measure time- One is a vertical mass-.docx
We have two oscillators- used to measure time- One is a vertical mass-.docx
 

Recently uploaded

Transparency, Recognition and the role of eSealing - Ildiko Mazar and Koen No...
Transparency, Recognition and the role of eSealing - Ildiko Mazar and Koen No...Transparency, Recognition and the role of eSealing - Ildiko Mazar and Koen No...
Transparency, Recognition and the role of eSealing - Ildiko Mazar and Koen No...
EADTU
 
Spellings Wk 4 and Wk 5 for Grade 4 at CAPS
Spellings Wk 4 and Wk 5 for Grade 4 at CAPSSpellings Wk 4 and Wk 5 for Grade 4 at CAPS
Spellings Wk 4 and Wk 5 for Grade 4 at CAPS
AnaAcapella
 
SPLICE Working Group: Reusable Code Examples
SPLICE Working Group:Reusable Code ExamplesSPLICE Working Group:Reusable Code Examples
SPLICE Working Group: Reusable Code Examples
Peter Brusilovsky
 
QUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lesson
QUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lessonQUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lesson
QUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lesson
httgc7rh9c
 

Recently uploaded (20)

FICTIONAL SALESMAN/SALESMAN SNSW 2024.pdf
FICTIONAL SALESMAN/SALESMAN SNSW 2024.pdfFICTIONAL SALESMAN/SALESMAN SNSW 2024.pdf
FICTIONAL SALESMAN/SALESMAN SNSW 2024.pdf
 
diagnosting testing bsc 2nd sem.pptx....
diagnosting testing bsc 2nd sem.pptx....diagnosting testing bsc 2nd sem.pptx....
diagnosting testing bsc 2nd sem.pptx....
 
Play hard learn harder: The Serious Business of Play
Play hard learn harder:  The Serious Business of PlayPlay hard learn harder:  The Serious Business of Play
Play hard learn harder: The Serious Business of Play
 
Transparency, Recognition and the role of eSealing - Ildiko Mazar and Koen No...
Transparency, Recognition and the role of eSealing - Ildiko Mazar and Koen No...Transparency, Recognition and the role of eSealing - Ildiko Mazar and Koen No...
Transparency, Recognition and the role of eSealing - Ildiko Mazar and Koen No...
 
UGC NET Paper 1 Unit 7 DATA INTERPRETATION.pdf
UGC NET Paper 1 Unit 7 DATA INTERPRETATION.pdfUGC NET Paper 1 Unit 7 DATA INTERPRETATION.pdf
UGC NET Paper 1 Unit 7 DATA INTERPRETATION.pdf
 
How to Add a Tool Tip to a Field in Odoo 17
How to Add a Tool Tip to a Field in Odoo 17How to Add a Tool Tip to a Field in Odoo 17
How to Add a Tool Tip to a Field in Odoo 17
 
Spellings Wk 4 and Wk 5 for Grade 4 at CAPS
Spellings Wk 4 and Wk 5 for Grade 4 at CAPSSpellings Wk 4 and Wk 5 for Grade 4 at CAPS
Spellings Wk 4 and Wk 5 for Grade 4 at CAPS
 
What is 3 Way Matching Process in Odoo 17.pptx
What is 3 Way Matching Process in Odoo 17.pptxWhat is 3 Way Matching Process in Odoo 17.pptx
What is 3 Way Matching Process in Odoo 17.pptx
 
dusjagr & nano talk on open tools for agriculture research and learning
dusjagr & nano talk on open tools for agriculture research and learningdusjagr & nano talk on open tools for agriculture research and learning
dusjagr & nano talk on open tools for agriculture research and learning
 
Graduate Outcomes Presentation Slides - English
Graduate Outcomes Presentation Slides - EnglishGraduate Outcomes Presentation Slides - English
Graduate Outcomes Presentation Slides - English
 
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptx
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptxHMCS Max Bernays Pre-Deployment Brief (May 2024).pptx
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptx
 
AIM of Education-Teachers Training-2024.ppt
AIM of Education-Teachers Training-2024.pptAIM of Education-Teachers Training-2024.ppt
AIM of Education-Teachers Training-2024.ppt
 
Accessible Digital Futures project (20/03/2024)
Accessible Digital Futures project (20/03/2024)Accessible Digital Futures project (20/03/2024)
Accessible Digital Futures project (20/03/2024)
 
Introduction to TechSoup’s Digital Marketing Services and Use Cases
Introduction to TechSoup’s Digital Marketing  Services and Use CasesIntroduction to TechSoup’s Digital Marketing  Services and Use Cases
Introduction to TechSoup’s Digital Marketing Services and Use Cases
 
SPLICE Working Group: Reusable Code Examples
SPLICE Working Group:Reusable Code ExamplesSPLICE Working Group:Reusable Code Examples
SPLICE Working Group: Reusable Code Examples
 
Wellbeing inclusion and digital dystopias.pptx
Wellbeing inclusion and digital dystopias.pptxWellbeing inclusion and digital dystopias.pptx
Wellbeing inclusion and digital dystopias.pptx
 
HMCS Vancouver Pre-Deployment Brief - May 2024 (Web Version).pptx
HMCS Vancouver Pre-Deployment Brief - May 2024 (Web Version).pptxHMCS Vancouver Pre-Deployment Brief - May 2024 (Web Version).pptx
HMCS Vancouver Pre-Deployment Brief - May 2024 (Web Version).pptx
 
Ernest Hemingway's For Whom the Bell Tolls
Ernest Hemingway's For Whom the Bell TollsErnest Hemingway's For Whom the Bell Tolls
Ernest Hemingway's For Whom the Bell Tolls
 
QUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lesson
QUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lessonQUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lesson
QUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lesson
 
REMIFENTANIL: An Ultra short acting opioid.pptx
REMIFENTANIL: An Ultra short acting opioid.pptxREMIFENTANIL: An Ultra short acting opioid.pptx
REMIFENTANIL: An Ultra short acting opioid.pptx
 

S12-1 (Learning Objective 1- Explain the purposes of the statement of.docx

  • 1. S12-1 (Learning Objective 1: Explain the purposes of the statement of cash flows) State how the statement of cash flows helps investors and creditors perform each of the following functions: a. Predict future cash flows Solution answer.. purpose od cash flow statments...The purpose of the cash flow statement or statement of cash flows is to provide information about a company's gross receipts and gross payments for a specified period of time. The gross receipts and gross payments will be reported in the cash flow statement according to one of the following classifications: operating activities, investing activities, and financing activities. The net change from these three classifications should equal the change in a company's cash and cash equivalents during the reporting period. For instance, the cash flow statement for the calendar year 2013 will report the causes of the change in a company's cash and cash equivalents between its balance sheets of December 31, 2012 and December 31, 2013. The statement of cash flow's primary purpose is to provide information regarding a company's cash receipts and cash payments. The statement complements the income statement and balance sheet. When credit decisions are made, many factors must be assessed. The income statement and balance sheet provide information about some of these factors, the cash flow statement provides information about the other factors. and through these data invester can anlysis the company position .......... Over the life of a company, total net income and net cash inflow will equal. However, since income determination is based on accrual accounting, income and cash flow will rarely equal in an annual accounting period.