List the purposes and uses of the statement of cash flows and discuss the three activities that the statement of cash flows depicts.

Responses

In need of a 125 response/discussion to EACH of the following forum posts. There are (2) different Forum posts. Agreement/disagreement/and/or continuing the discussion. The two interactive posts should each be substantial, relevant, and engaging. Replies to classmates should include direct questions. In-text citations and references may be in APA format. Original forums discussion/topic post is as follows: (Use/Cite references to support your ideas)

Financial Analysis

Chapters 16 and 17 of the textbook have been used this week.

FORUM POST 1: List the purposes and uses of the statement of cash flows and discuss the three activities that the statement of cash flows depicts.

Hello class,

The main purpose of the cash flow statement is to do exactly what the name says. Provide a snapshot of cash coming in and cash going out for a reporting period. One of the main uses of a cash flow statement is to show whether or to what extent a company is generating cash. These statements are used in the business community when acquiring a company, an potential buyer or investor wants to make sure that a company is profitable prior to acquisition. These statements are broken down into three main categories operating, investing, and financial activities.

Operating activities are the basic income generating activities of a company. Cash generated from the sale of goods from a company that deals in sales is an example of basic operating activities in the cash flow statement. The investment activities on the statement are any gains and losses from investments made by the company. These could include the purchase of property or stack and bonds. Financial activities contain the total Of the financial changes a company had during the reporting period. These could be loans from a lender or the sale of a property.

Reference:

Bragg, S. (2019, March 10). Cash flows from financing activities. Retrieved July 01, 2020, from https://www.accountingtools.com/articles/what-are-…

FORUM POST 2: List the purposes and uses of the statement of cash flows and discuss the three activities that the statement of cash flows depicts.

Hello Everyone,

While the creation of the statement of cash flows may be a legal requirement for many (Accounting For Management, n.d.), legality is not the only reason that these reports are important to the accounting profession. While there are a few reasons why these reports are important, the main purpose of the statements of cash flow is to report the cash receipts and cash disbursements of a business for a specified accounting period; in addition, the statement of cash flows report on the businesses investing and financing activities (Hermanson, Edwards, & Maher, 2011). By assembling the three sections of this report (cash flows from Operating activities, cash flows from Investing activities, and cash flows from Financing activities) businesses are able to not only see the effects of managements past decisions but are able to summarize the effects of the operating, investing, and financing activities of the business have on the cash of the business. This is nice because it allows for interested parties to see information that they can only get in bits and pieces in other reports (Hermanson, Edwards, & Maher, 2011). This information also allows for the anticipation of future cash flows (Accounting For Management, n.d.). The three sections of this report provide information pertinent to the successful operation of an entity. The operating activities section provides entities with information regarding the net amount of cash received and/or disbursed during a given period of time; the investing activities section gives information related to the acquisition or disposal of noncurrent assets; and finally the financing activities section provides information about the cash effects of transactions and events involving creditors and owners (Hermanson, Edwards, & Maher, 2011). Combined these reports assist in assessing the working capital of an entity and provides insight into its ability to pay expenses and dividends while giving proof to its ability to generate future net cash flows Hermanson, Edwards, & Maher, 2011).

Accounting For Management. (n.d.). Statement of cash flows and the purpose of its preparation. Retrieved from https://www.accountingformanagement.org/importance…

Hermanson, R., Edwards, J., & Maher, M. (2011). Accounting: A business perspective. (8th ed.). Retrieved from https://archive.org/details/ost-business-tbq_pa_ac…

 

Subject: Accounting,

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