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Cash flows are complementary financial statements that record the flow of cash and other cash equivalents of a firm. The cash flow statement is different from the income statement and balances sheet as it does not reflect cash amounts of items sold or bought on credit.The cash flow records the current flow of cash hence used to determine the liquidity of a firm. The amount of cash in the statement of cash flow is thus not equivalent to the net income.This is because income on the balance sheet and income statement includes both the cash sales and the sales that …

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