ACCT 504 Discussion The statement of cash flows

ACCT 504 Discussion The statement of cash flows

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The statement of cash flows is an important financial statement that is required to be released along with the income statement and balance sheet by every publicly traded company.

We did not have this requirement prior to the year 1988. Let's begin our discussion by asking this question: When we already have the income statement and balance sheet to tell us about the financial performance and financial health of a company, why was there a need to require companies to prepare a statement of cash flows?

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...amortization, and non-cash charges. For investors, the cash flow reflects a company's financial health. The ...for operations the better the ability of the company to function and therefore is more healthy.