8-2 Discussion: Statement of Cash Flows and Course Reflection

Statement of Cash Flows and Course Reflection
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Statement of Cash Flows and Course Reflection
The cash flow statement provides information that offers reconciliation concerning the starting and ending balances relating to the cash and cash equivalents of a company over a financial or accounting period (Nurnberg, 2006). It helps in ensuring the health and stability of a firm because it provides information regarding the borrowing, as well as the debt repayment undertakings of the firm. Further, it ensures that information about the sale and repurchase of a firm’s ownership securities and also all factors that affect the firm’s liquidity, as well as solvency such as servicing its loans and paying all the dividends (Siegel, 2006),
The three main parts of the cash flow statement are operating activities, investing activities, and also financing activities (Ramachandran & Kakani, 2010). The operating activities is the principal income that relate to all the producing activities of the firm. For instance, the cash receipts from all the sale of goods and services, interest gained from creating loans, and also cash obtained after sale of securities that were meant for trading. Investing activities is contained in cash flow statement, which is for the acquiring and also disposal of the long-term assets including all investment...