Cash flow statement

Every businessman needs capital or cash for successful implementation of business activities. Capital is needed for acquiring fixed assets, while cash is needed for acquiring current assets or payment of current liabilities. Cash requirements or cash planning or cash management is very important for every business.

Proper cash planning is needed for paying cash liabilities or payment for the supplies to get the facility of cash discount. A reasonable cash balance should be maintained, it should not be too high or too low both flow situations are bad.

There are many technologies for cash management, cash flow statement is one of the techniques. It speaks about cash inflow and cash outflows and the balance in the end. The management can know, how cash is coming and how the same is used. In the present chapter, cash flow statement is fully discussed in theory and practical both.