GLG Accounting | Comprehensive Cash Flow Statement Preparation

1. Cash Flow Statement Preparation is must to do kind of thing as far as business is concerned. Some people take it as a liability while, for many other it is just like doing the anatomy of their business. Think about such a report that keeps you updated with a single penny from here to there across your accounts. In fact, it has dual functions. On one hand, it’s acts as a report while aside of this you can call it an analytical instrument as well. In the following passage, we are going to discuss a bit more about these reports. Sections you would find there A statement of cash flow comes with three mandatory sections. We can call them as the primary section. There is a fourth section too, but it is of optional nature, and you can leave it blank. Leaving the fourth section blank is not going to put any impact on the facts mentioned in the remaining report. As we have mentioned above, Cash Flow Statement Preparation involves working around three major sections, let us discuss them briefly (i) Operating activities This section deals with the cash flow either inward (earned) or outward (paid) about the normal and routine business activities. The evaluation of data presented in section tells you about the real state and standing of your business. There are simple analytical methods by using which you could transform the data present in this section particularly and in this report generally into a useful piece of information. As an example of inward and outward flow of the operating activities, you can assume, selling or products and employees salaries respectively. (ii) Investment Activities It is the second section, which we maintain during Cash Flow Statement Preparation. It's different from other two sections as it deals only with the cash flow that take place due to an investment instrument. Some of the example to define this section more efficiently are, paying dividends (outward), buying of land (outward). the issuing new loans (outward), receiving loan back (inward) and selling a property (inward). (iii) Financing Activities Financing activities is the third and last one of the mandatory fields. While Cash Flow Statement Preparation, the data related to the business finance and liquidity relates to this section. This section deals with the either directional movement of cash in contrast to efforts made to raise the liquidity for the company. To understand it in a better way think about the money received from banks in form loans (inward) and dividend paid to the shareholders (outward). What did this report indicate?

2. There are many who don’t take this report and its contents seriously especially small business owners. However, this report provides you with some useful insight into the performance of your business. Let us discuss some of it is it benefits briefly; Forecasts Performance There are many who use this kind of financial statement to foresee their possible and probable posting in near future. Expert can figure out the amount of cash and uncertainty factor related to the future cash flow easily Engages Shareholders & employees If your business is on the right track than your cash flow statement can be an instrument to keep your employees and shareholders engaged. It provides all the information about a business ability to pay dividends in future. Identifying Loopholes This financial report also provides key information about the difference between earning (net incomes) and spending (cash provided). This difference indicates the optimization level of your operating activities. Consider a Professional On the basis of all the information available, we can clearly see that there are various benefits, which come with the financial reports. We recommend you to seek some professional assistance for your Cash Flow Statement Preparation, as it is a very serious matter. Address:400 Central Ave, Suite 340B, Northfield, IL 60093, USA Phone:(312) 754-9377 Referral: https://www.glgaccounting.com/cash-flow-analysis/