Cash flow statements just as the Income Statement and Balance Sheet are prepared using historical information which is in the past. It therefore does not provide complete information to assess the...
Cash items in the cash flow statement encompasses all items that can be categorised under cash and cash equivalent. these include cash, bank, bank overdraft, short term investment.
Cash flow financial statements keep a record of the money coming in and the money going out. The idea is to have it balanced at the very least, but ideally you'd like the money going out to be less.
lNet income based on accrual accounting is not cash earnings.lWe need a statement of cash flows to provide information about a company's sources and uses of cash.