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The cash flow statement prepared with historical information helps in determining the future cash flow of the company.In preparing reports, it presents events and transactions from different angles by which management can take multipurpose decisions.It helps a company in getting an idea of future cash positions.It provides information relating to the size and kind of cash and cash equivalent.It provides information relating to cash flow, net assets difference, and liquidity of a business concern.The main advantages arising out of the cash flow statement are as follows The three main elements of the financial statements, balance sheet, income statement, and cash flow statements, represent a financial position, trend, and business activities of a business concern, respectively. The use of the cash flow statement in the form of cash and cash equivalent as the current asset and its direct influence on fixed assets and other current assets do exist. The cash flow statement is recognized as an indispensable part of the financial statements for its characteristics. It also helps shareholders and potential investors in taking short-term and long-term decisions. Moreover, the cash flow statement plays an important role in planning and controlling the future courses of action of a business concern.
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Knowing cash and cash equivalent and outsourcing inflow of a concern for a particular period.
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An experimental study was carried out with students taking a Business Management and Administration degree at Universitat de Vic as well as students on the Accounting and Finance course at Universitat Autònoma de Barcelona, using data from the retail company Mercadona S.A. This has been done by means of an empirical study, showing that, in order to undertake a comprehensive analysis of the company's equity, economic and financial situation, it is essential to study and analyse the CFS. The basic purpose of this research is to determine the relevance of the cash flow statement (CFS), also known as statement of cash flows, for analysing a company’s financial statements.