STATEMENT OF CASH FLOWS   Term Paper ID:37758 Click to get this paper

Essay Subject: Identifies the purpose of the statement of cash flows the various components that comprise ...... More...

3 Pages / 675 Words 3 sources, 4 Citations, APA Format $12.00 Return to List of Papers

Paper Abstract: Identifies the purpose of the statement of cash flows, the various components that comprise that statement and how the statement is used by different stakeholders. Paper Introduction: The Statement of Cash Flows Introduction If accounting is the language of business three key financialstatements are its literature The balance sheet income statement statement of owners\' equity and statement of cash flows are used bystakeholders both inside and outside the company to analyze the company\'soperations The balance sheet income statement and statement of owners\'equity are often well-understood by stakeholders and provide informationabout the company at a specific date The balance sheet defines thecompany\'s ownership structure and overall financial health-including whatit has Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Analysis The statement is used internally by managers and decision makers toensure that the company has sufficient funds to meet its immediatefinancial obligations. Such obligations that have cash components includepayroll, taxes and lease payments. (2 3, Feb-March). More typically,however, the indirect method is used where the statement begins with thecompany's net income figure and then adjustments are made based on cashtransactions. Although the statement of cash flows emphasizes short-term performance, itis nonetheless a bellwether for long-term success potential for mostorganizations. Even companies with strong accounts receivable can have short-term cash flow problems. This time period can be monthlyor quarterly, but companies also typically include statements of cash flowswith their annual reports that cover the fiscal year in question. R. The balance sheet, income statement and statement of owners'equity are often well-understood by stakeholders and provide informationabout the company at a specific date. Serious concern arises when cash is eitherexcessive over a long-period of time-suggesting that the company could beusing this asset better-or when cash is insufficient over a long period oftime. This latter condition is of concern and is one reason that analystscompare cash flow statements over time. Book-mart Press.Jeter, D. The National Public Accountant, p. C. The Statement of Cash Flows Introduction If accounting is the language of business, three key financialstatements are its literature. Using the statement of cash flows. ReferencesCole, G. The balance sheet defines thecompany's ownership structure and overall financial health-including whatit has and what it owes-while the income statement summarizes the company'sactivities for the past fiscal year. This research considers thepurpose of the statement of cash flows, the components of the statement,and the importance of the statement to stakeholders. New companies often have cash flow problems as they are in the processof acquiring the capital equipment necessary to keep their company going,and often have more demands on their cash than their current revenues cansupport. (2 5, July-August). The statement of cash flows is thus one way thatstakeholders are able to supplement the information contained in the incomestatement in order to understand the business more completely (Jeter,2 5). As with the other two keyfinancial statements, stakeholders compare the statements of cash flowsover several periods in order to gain a more accurate understanding of thecompany's operations and financial health. Contents The statement of cash flows is divided into subsections, includingoperating activities, investing activities and financing activities.Information included in the operating activities section is tied to theactivities associated with the current assets and current liabilitiessections of the balance sheet, as well as with items such as depreciationand gains or losses on sales of long-term assets. (1998). H. Commercial Lending Review, 2 , pp. Purpose The statement of cash flows shows the movement of cash through abusiness over a specific period of time. The investing activities section accounts for the changes in thebalances of long-term assets, including land and buildings. 14.Ittelson, T. Externally, the statement is used bycurrent and potential vendors who are interested in the company's abilityto meet short-term obligations, by investors who are interested in thefinancial health of the organization, and by potential employees who wantto ensure that the company will be able to compensate them in a timelymanner (Ittelson, 1998). Because many companies use the accrual method of accounting,some items on the income statement will not have been realized and maynever be realized. If thedirect method of generating the statement of cash flows is used, thestatement bears a resemblance to the income statement. Depreciation , forexample, has no actual cash associated with it, so its effect is recognizedin the statement of cash flows (Cole, 2 3). The balance sheet, income statement,statement of owners' equity and statement of cash flows are used bystakeholders both inside and outside the company to analyze the company'soperations. The statement of cash flowsidentifies how the company accumulated cash and how it spent cash for agiven period of time, also typically one year. The financingactivities section accounts for changes in the long-term liability andstockholder equity accounts, including notes payable, common stock andtreasury stock (Cole, 2 3). 3-1 . Conclusion The statement of cash flows is an important financial statement thatis sometimes overlooked in favor of the balance sheet and income statement. Financial Statements. Illustrating the statement of cash flows. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.

Many of our Papers can be Downloaded From This Site!

PLEASE READ THIS, IT IS IMPORTANT!

Office hours are Monday through Friday, from 9 am to 5 pm (PST). You may place orders for custom research over the phone during office hours. E-mail requests can be made to our graduate and undergraduate department any time, and will be reviewed during office hours. You may also contact customer service any time through e-mail, and we will review your message during business hours. A great many papers can be downloaded right from this site, but not all of them. If you would like to know if a particular paper is downloadable, just look in the description for: "Available for Internet Download: Y" or "Available for Internet Download: N" If you wish to purchase a paper which is NOT available for immediate download, you will need to make other shipping arrangements. Also, please be aware that these orders are processed Monday through Friday from 9 am to 5 pm (PST). If you place your order after 4:45pm on Friday, it will not be processed until the following Monday morning. We charge $8 per page for all of our pre-written reports, plus shipping (and tax for California residents). However, the highest cost of any ONE report is $136, or 17 pages. Please, take a moment. Make sure you have chosen the report you want or need BEFORE you complete your order. If you are not sure, allow us to help you. We do not offer refunds or exchanges, so it is important for you to let us answer your questions during office hours. Reports which are e-mailed or downloaded are in Microsoft Word format. We are making more reports available for e-mail delivery faster than we can update our listings. Please call to check on the status of particular reports. There are many other shipping options which are listed on the Checkout page.