Question

1 what are the parts of the statement of cash flows and what do you learn by reading this document? 2 Do financial ratios from balance sheets and income statements tell us whether to buy or sell stock? 3 The efficient market hypothesis suggests that it is difficult to outperform the market on a

Answer 1

Parts of the Statement of Cash flows are 1)Cash flows from Operating Activities ; 2) Cash flows from Investing Activities ; 3) Cash flows from Financing Activities. We learn reading from this statement as such, how much has been the changes occurred in the cash movements, inventory management, working capital, how much dividends has been issued from the Operating cash flows. We understand if the company how much the cash is spent on investments, and how much cash in generated from the Investing Cash flows. Financing activities showcase how much debt has been repaid, how much debt has been issued etc.