What should you look for in cash flow?
Posted: Sun Dec 22, 2024 6:53 am
When you want to take a closer look at a company, it is useful to evaluate it through a second lens: the financial one. Many companies think about the impact of management effectiveness on the amount of funds. The answer to this question should be sought
in the operating cash flow statement, already mentioned above.
This category is a monetary representation of the financial result (surplus in case of positive value, or loss
in case of negative value). Most of the taiwan phone code cash income is generated within the operating activities. On the other hand, the cash costs or expenses are absorbed within the investment and financing activities.
The study of cash flows is very important because companies, especially in the long term, need to control their liquidity. Its temporary or permanent loss leads in most cases to the bankruptcy of the company. An equally undesirable phenomenon is the persistence of excess liquidity in a company, which may indicate
poor management or a lack of basic investment knowledge (according to the principle that "uninvested cash loses value"). This situation indicates that management does not take advantage of opportunities to obtain additional profits, even on the financial market (for example, Treasury bonds).
The main source of financial surplus (profit) in a manufacturing company should be operating activities. The situation is different for service companies or those that engage in investment as part of their main activity, in which case the majority of the financial surplus can be generated from investment activities (changes in ownership of property rights, movable assets, fixed assets, real estate, etc.) or from financing activities.
in the operating cash flow statement, already mentioned above.
This category is a monetary representation of the financial result (surplus in case of positive value, or loss
in case of negative value). Most of the taiwan phone code cash income is generated within the operating activities. On the other hand, the cash costs or expenses are absorbed within the investment and financing activities.
The study of cash flows is very important because companies, especially in the long term, need to control their liquidity. Its temporary or permanent loss leads in most cases to the bankruptcy of the company. An equally undesirable phenomenon is the persistence of excess liquidity in a company, which may indicate
poor management or a lack of basic investment knowledge (according to the principle that "uninvested cash loses value"). This situation indicates that management does not take advantage of opportunities to obtain additional profits, even on the financial market (for example, Treasury bonds).
The main source of financial surplus (profit) in a manufacturing company should be operating activities. The situation is different for service companies or those that engage in investment as part of their main activity, in which case the majority of the financial surplus can be generated from investment activities (changes in ownership of property rights, movable assets, fixed assets, real estate, etc.) or from financing activities.