Undeniably, profitability is the ultimate goal of companies and readers of a company’s financial statements are very much interested in the reported profit figure. The profit figure is achieved by the preparation of the statement of profit or loss and the statement of financial position. If the foregoing is the case, why then bother about the statement of cash flows?
QUESTION 3
Undeniably, profitability is the ultimate goal of companies and readers of a company’s financial statements are very much interested in the reported profit figure. The profit figure is achieved by the
preparation of the statement of profit or loss and the statement of financial position. If the foregoing is the case, why then bother about the statement of
Definition:
Cash flow statements are the statements that determine the inflow and outflow of cash from three major activities that are carried out in business i.e. operating activities, investing activities, and financing activities. Its purpose is to monitor the inflow and outflow of cash during a period.
The income statement is a statement that helps in calculating the income or the profit and loss of a firm. The total expenses are deducted from total revenues to find out the net profit or loss. The main purpose of the income statement is to represent the financial earnings of a company over a period of time.
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