Why are cash flow statements needed?

Why are cash flow statements needed in addition to Profit and Loss statements and balance sheets?

Asked by Martin Montgomery on March 22nd, 2012 @ 1:21 a.m.
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Cashflow statements are important to any company. These reports show the movement of their cash (something very important for any company!) over any given period.

It tells the company the movements (in or out of the company) of cash by business activity e.g. financial or operational or acquisitions.

It also shows the company how much cash they have at the end of the given period. Something each company should keep an eye on, because each company needs an appropriate level of cash to keep on operating!
Answered by Melissa Leong on March 26th, 2012 @ 5:15 p.m.