Question

Anyone can help me answer this question around 300 words each with typing and with link!!! need it asap!!! (finance statement analysis)

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Income Flows versus Cash Flows; Understanding the Statement of Cash Flows Do you prefer income flows or cash flows. Share your opinion. Then search the Internet for articles about income flows versus cash flows. Post the article that you find to be the most unreasonable. Explain why?

Answer 1

Income flow versus cash flow:-

Both are integral parts of a corporate Balance sheet. The statement of cash flow measures the sources of a company's cash and its uses of cash over a specific time period.

The Income statements measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

A cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. It captures the current operating results and changes on the balance sheet, such as increases or decreases in account receivable or account payable and does not include non cash accounting item such as depreciation. The cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. A cash flow statement is used to determine the short-term viability and liquidity of a company.

An income statement, the most common financial statement, shows a company's revenue and total expenses  including non cash accounting such as depreciation, traditionally over a period of one month. An income statement is used to determine the performance of a company, specifically how much money it made, how much money it paid out, and the resulting profit or loss from the revenue and expenses.

The cash flow statement is linked to the income statement by net profit.

Net income is the profit a company has earned for a period while cash flow from operating activities measures, in part, the cash going in and out during a company's day-to-day operations.

However, both are important in determining the financial health of a company.