Explain any four objective of preparing cash flow statement

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Explain any four objective of preparing cash flow statement

The main objective of preparing cash flow statement for a particular accounting period is to present information regarding inflow and outflow of cash.

Besides,

It presents the investment and financial activities of a concern for a particular period. It also fulfills the following objectives;

Ensuring future positive cash flow of particular concern.

Ensuring capacity of an organization to pay a dividend.

Identifying non-cash items ensuring cash income and expenses of a concern.

Comparing various items of the current year with those of last year.

Knowing cash and cash equivalent and outsource inflow of a concern for a particular period.

Moreover, cash flow statement plays an important role in planning and controlling future course of action of a business concern.

It also helps shareholders and potential investors in taking short-term and long-term decisions.

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Explain any four objective of preparing cash flow statement for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Explain any four objective of preparing cash flow statement covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Explain any four objective of preparing cash flow statement.

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