Cash Flow Statement Ratios

Cash flow statement provides information about the organization's liquidity and its ability to generate funds from internal sources. Generally the data in the cash flow statements is used for -

1. Reviewing individual cash flow items for analysis.

2. Examining the trend of different cash flow components over time.

3. Examining the relationship between cash flow components and related elements in income statement.

4. Analyzing the interrelationship between cash flow components.

When analyzing the liquidity of a firm, it is believed that cash flow information is more appropriate than balance sheet or income statement information. Ratios, which can show the cash position or any change in the cash position of the organization, are called as Cash Flow Ratios.  High level of these ratios indicates the increase in cash earnings and liquidity of the organization.  Cash flow ratios, as a tool for analysis, have been slow to develop; however, they now play a prominent role. Most credit analysts use these ratios in their credit rating decisions.

Cash flow ratios are used to test for solvency and liquidity. They are used to test how much cash was generated over a period of time and compare that to the near-term obligations. This gives the management a dynamic picture of the resources that must be pooled to meet its obligations.

Email based Accounting assignment help - homework help at Expertsmind

Are you searching Accounting expert for help with Cash Flow Statement Ratios questions?  Cash Flow Statement Ratios topic is not easier to learn without external help?  We at www.expertsmind.com offer finest service of Accounting assignment help and Accounting homework help. Live tutors are available for 24x7 hours helping students in their Cash Flow Statement Ratios related problems. We provide step by step Cash Flow Statement Ratios question's answers with 100% plagiarism free content. We prepare quality content and notes for Cash Flow Statement Ratios topic under  Accounting theory and study material. These are avail for subscribed users and they can get advantages anytime.

Why Expertsmind for assignment help

1. Higher degree holder and experienced experts network
2. Punctuality and responsibility of work
3. Quality solution with 100% plagiarism free answers
4. Time on Delivery
5. Privacy of information and details
6. Excellence in solving Accounting questions in excels and word format.
7. Best tutoring assistance 24x7 hours