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Accounting Theory for Cash Flow Statements

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What does a statement of cash flows tell you about a company?
Why is the statement of cash flows important?
Can a company have profits but no cash? Why

What is included in each section of the statement of cash flows?
What does each section tell you about the company?
Which of the three classifications of activities included on a statement of cash flows is the most important? Why?

What are the differences between the direct and indirect method of presenting a statement of cash flows?
Which method of presenting a statement of cash flows is the best? Why?

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Solution Summary

This solution provides definition and discussion for 'cash flow,' componenets of cash flows, the important part of cash flow and the difference between direct and indirect method. This solution is approximately 700 words.

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