24 May '11, 9am

The Importance Of Cash Flow Analysis: As we embrace the full influx of financial reports for the earnings season...

The Importance Of Cash Flow Analysis: As we embrace the full influx of financial reports for the earnings season...

As we embrace the full influx of financial reports for the earnings season of 1st quarter, it is pertinent to note that besides paying close attention to profit margins and management’s view of the company that you’re looking at, an important piece of the financial report called the “cash flow statement” should be given a closer look as well. The importance of cash flow statement lies in the fact that it explains the changes in cash and gives insight to the company’s operating, investing and financial activities. Also, cash flow statement will unveil the company’s ability to generate cash to meet its short-term obligations, thereby assessing if company’s liquidity and solvency position is sound. In this article, I will show you a brief example on assessing the health of the company using Cash Flow Analysis. Before I go forth with my explanation, a stark contrast has to be ...

Full article: http://www.sharesinv.com/articles/2011/05/24/importance-o...

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