Question & Answer: summarize how cash flow generate value? (100 words)…..

summarize how cash flow generate value? (100 words)

Expert Answer


Cash flow is very important for any firm and we have many things can be implicated from the cash flow statements some of they are below:

  • By cash flow we can say if we are in position to pay to our creditors or not
  • It consists of three segments cash flow operating activities, investing activities and operating activities. We can say where we are using money generated from operating activities and where we have spent it
  • Are we in position to pay interest for the debt taken can be known. The liquidity and profitability position can be known
  • By seeing it the investors can make better judgement to invest or not
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