Tuesday 31 August 2010

Information obtained through analysis of cash flow statement.

Through analysis of individual cashflows, investors and creditors can examine the following characteristics of a business:

1.  Whether financing is internally or externally generated.
2.  Whether the firm is able to cover all debt obligations.
3.  Whether the firm is able to afford expansion.
4.  Whether the firm is able to pay dividends.
5.  Whether the firm has financial flexibility.

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