Explain why the statement is necessary

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Question: A statement of cash flows is often one of the most used and least understood of the key financial statements. However, it is a vital report to use when evaluating or analyzing a company. Identifying where a company is receiving and using its cash-through operations, investing, and financing activities-is more important than knowing the company's net income:

• Describe the types of accounts/transactions in each section of the statement of cash flows.

• Explain how the net effect of cash used in each activity will help to evaluate liquidity, solvency, and financial flexibility.

• Explain why this statement is necessary even when a company has substantial net income.

• Substantiate your response with examples.

Respond to at least one additional post.

Reference no: EM132758948

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