Explore BrainMass


Discussion Topic: Cash Flow Analysis

After reading Chapter 4: Statements of Cash Flow & Analysis of Ratios, along with any other research conducted, please discuss why comprehending and managing cash flow is important for financial success.


Solution Preview

When it comes to comprehending and managing cash flow for success, this is important to keep a business running without facing any financial diffficulty with the federal and state government. The three areas that are worth noting when it comes to cash flow are a starting and ending balance sheet as well as an income statement. An income statement helps to make sure that everything is calculated correctly from sales in regards to what is cash adjusted. For example, a bank is able to get their money back depending on what is used in various businesses. This allows for interest with the consumer who is either putting it in the bank or taking it out on a daily basis. Some more instances include the following. A person can pay off a debt or buy something with cash, such as food and clothing. In essence, ...

Solution Summary

This solution discussed a cash flow analysis on the importance of it for financial success.