Explain the importance of the statement of cash flows in the business plan of an entrepreneur.

      

Explain the importance of the statement of cash flows in the business plan of an entrepreneur.

  

Answers


Martin
The importance of the cash flow is as follows;

- It helps depict changes in the cash position of the business
- Necessary to assess the ability of a business entity to generate cash so that it can be used as and when it is needed
-Moreover, it is required to assess the liquidity and solvency position of a business
- it explains the changes in cash and gives the information related to the business operating, investing and financing activities
- The basic objective of cash flow statement is to provide the information to the management about the cash receipts and the cash payments of an organization ? it is used in efficient cash management
-ensure if adequate cash is available to meet the liabilities ? Cash flow statement is useful to plan financial operations in an efficient manner
marto answered the question on February 4, 2019 at 10:08


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