Operating Activities of the Cash Flow and its Importance in Company’s Financial Position

Understanding the Statement of Cash Flow-Cash Balances
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Understanding the Statement of Cash Flow-Cash Balances
The cash balance is an absolute figure of the company’s cash asset. However, the statement of cash flow depicts the movement of money in and out of the company. The statement of cash flow is presented with the headings of operating activities, investing activities, and financing activities. Its opening balance is the profits or losses figure from the income statement. We take a look at the operating activities of the cash flow and how they are important, more than the cash balance, in understanding a company’s financial position.
The operating activities cash flow balance shows the actual cash realized from or expended towards the normal activities of the firm and...