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5 DISCUSSION
Information on a company's cash flows is helpful in
giving financial report consumers a basis for
assessing the company's capacity to create cash as
well as equivalent to cash, and the company's require
to utilize these flow of cash. The monetary judgments
given by managers involve a valuation of a company's
capability to generate cash as well as equivalents to
cash and the timeframe and certainty of production.
The Standard deals by way of a cash flow report that
classifies cash flows over the period of operation,
investment and funding, in order to get information
about the evolutionary process in cash and the
equivalent of cash of the firm. Users of the budgetary
accounts of a company are interested in how the
company produces and utilizes cash. This is the case
irrespective of the severity of the operations of the
business and if cash, as may be the case with a
financial business, may be seen as the product of the
business.
Corporations require cash, but their main revenue-
producing activities may vary, for basically the same
reasons. They require funds to operate, pay their
liabilities and repay to their investors. The Cash Flow
Statement reports that facilitates organizations to
assess changes in a firm's net assets, its economic
position, as well as its opportunity to change cash
flow levels and times to adapt it to shifting conditions
and opportunities, when used in conjunction with
other financial statements. In analyzing the
company's capacity to create cash and cash
equivalents, cash flow information is valuable and
helps users to construct models that monitor and
measure the present value of cash flows from
different companies. It also improves the
comparability of operating performance reporting by
other companies, as it eliminates the impact of
differing accounting procedures for the same
transactions and occurrences.
6 CONCLUSION
Every business has the capability to generate a
positive cash flow for its future financing and
existence. Cash flow helps reduce the organization's
dependency on external money, duty service and
obligations, financial investment and an appropriate
dividend policy for investors. Any economic
decisions and the economic performance of the
business may also be evaluated using the cash flow
statement. The decisions based on cash flow
expectations can be taken and more information on
cash can be reviewed at any moment. When a
company produces more cash inflows than outflows,
it is the greatest way to assess the company's
performance. The essence of a management business
is the attraction and use of resources to obtain
products for which customers pay more than their
initial costs. Historical information on cash flow is
typically used as a measure of the quantity, timing
and safety of future cash flows. The extent to which
prior evaluations of future cash flows were assessed
and the link between profitability and net cash flow
and the effect of pricing changes is also valuable.
Since, the performance of any firm is greatly depends
on the financial statement of the cash flow that is why
it is very important to analyze the statement very
carefully. In many cases, firms are facing cash flow
issues while doing their business, sometime financial
statement goes into the negative cash flow. Under this
condition, firm may face financial issues in order to
perform their daily-to-daily operations. In order to
overcome such challenges, it is recommended that
financial managers must analyze the cash inflow and
outflow on daily basis so that the balance can be
maintain. Although, multifarious investigations have
been carried out earlier in this field but still there is a
pragmatic scope of more investigations in future to
explore the full potential of this field.
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