Statement of Cash Flows

Question: The final financial statement is the statement of cash flows. Cash is so important to an organization and

its financial health that a complete statement is devoted to presenting the changes that took place in that asset.

As can be determined from the title, this statement provides a picture of the various ways in which the company

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generated cash during the year and the uses that were made of it. How is the statement of cash flows structured?

Answer: Outside decision makers place considerable emphasis on a company’s ability to create significant cash

inflows and then wisely apply that money.“Statement of Cash Flows” presents an example of that

information in a statement of cash flows for Davidson Groceries for the year ended December 31, 2XX4. Note that

all the cash changes are divided into three specific sections: operating activities, investing activities, and financing