Discussion on the cash flow statement provides ination on corporate finance_20393.doc

Discussion on the cash flow statement provides information on corporate financeAbstract: The cash flow statement reflects cash and cash equivalents within a certain period of the inflow and outflow of information, dynamic reports. It is the balance sheet and a profit to add. Through the statement of cash flows can be more realistically reflect the companys financial information and perspectives that exist within enterprises deep-rooted problems. Key words: cash flow statements; enterprise; Financial Information The existing enterprise accounting system is based on an accrual-based generated balance sheet, income statement and profit distribution sheet, income statement identified in the current income or expenses may not have corresponding cash inflows or outflows, so the end of the calculated current profit amount and the actual differences must exist between the cash stock, or even a big difference. However, an accrual basis because of the use of a large number of accrued, prepaid, prepaid and other professional judgments, making the balance sheet and a profit-doped too many man-made factors that have led businesses in the current period income statement does not match the amount of profit and cash. Have adopted the cash flow statement prepared on the basis cash basis, excluding the objective factors and human factors, to better reflect the true business accounting information. The use of cash flow analysis, profitability is more intuitive than the use of more efficient, profitable enterprise that can explain the result in the termination of reason to explain the reasons for the survival of loss-making enterprises continue to explain the core issues of enterprise development. First, the new accounting standard, the meaning of cash flow statement Cash flow statement should reflect the enterprise in a certain accounting period the inflow and outflow of cash and cash equivalents reports. Cash refers to cash on hand and ready to cover deposits. Can not be readily available for payment of the deposit does not belong in cash. Cash equivalents are held by an enterprise of short duration, liquidity is strong, readily convertible to known amounts of cash, an insignificant risk of changes in value of investment. Of short duration, generally refers to the date of purchase within three months from maturity. Cash equivalents typically include debt maturing within three months of investments. The amount of realized equity investments are usually uncertain, therefore it is not cash equivalents. Enterprises should be based on specific circumstances, determine the scope of equivalents, once established shall not be changed at will. Cash flow is defined as cash and cash equivalents of the inflows and outflows. Cash flow by business, investment, fund-raising activity for the three categories, cash flow, net increase in economic activity by these three types of inflow, outflow total. In general, corporate net cash flows generated by operating activities is positive, business investment and net cash flow is negative, corporate financing activities Net cash flow positive and negative phases. From the flow structure, the cash inflow from operating activities was mainly sales of goods and rendering of services received in cash; cash inflow from investing activities is mainly dividend income, investment recovery and disposal of fixed assets; cash inflow from financing activities primarily for corporate borrowers and absorb the interests of funds. From the outflow structure, the cash outflow from operating activities was mainly purchase goods, receive services and payments to workers and for workers to pay cash; cash outflow from investing activities primarily for debt investments and acquisition of fixed assets, intangible assets and other long-term assets, expenses, Financing cash outflows primarily for debt repayment of principal and interest payments. Second, cash flow statement for the enterprises to provide financial information Cash flow business cash flow through reflection, revealing corporate ability to pay, solvency and liquidity, to provide business information on the cash flow situation. Record cash flow track the movement of enterprise funds, the cash flow statement of the relevant indicators reflects the status of the movement of funds and the earnings quality of information, help to evaluate the financial flexibility. Cash flow analysis will reveal both companies current financial situation and cash flow, companies can predict future cash flows and the development trends; can also reflect their solvency and ability to pay, to fully reflect the profitability of enterprises quality. From the composition of the cash flow statement point of view, mainly reflecting the information are: 1. To reflect the process of production and operation of cash inflow and outflow conditions Cash flow statement respectively from operating activities, investing activities and financing activities in three areas to reflect the enterprises cash inflow and outflow conditions. (1) The enterprise sources of cash. Corporate source of cash there are three channels: cash inflow from operating activities, investment activities, cash inflows and cash inflow from financing activities. (2) The enterprises cash used by the main direction. The cash to use three main directions: cash inflow from operating activities, investment activities, cash inflows and cash inflow from financing activities. Structural analysis of cash flow can be seen that the cash flows during the same period of comparison and analysis of different projects, including the inflow of structural analysis, structural analysis of outflow and inflow than outflow analysis to reveal the various parts of the enterprise cash flow relative significance. Reposted elsewhere in the paper for free download http:/ 2. Reflects the overall financial situation of the enterprise information The cash flow statement, cash flow into cash flow generated from operating activities, financing activities generated cash flow and cash flow from investing activities in three parts. Through this three-part cash inflow and outflow of information, it is clear the main business of cash inflows and outflows of the sources of various activities in the total of cash inflows and outflows of cash inflow and outflow of the weight and a reasonable degree of order to reflect the companys overall financial conditions. (1) business activities. For any one business, the amount of cash inflow from operating activities, the bigger the better, because it represents a normal business the ability to obtain cash. In a market economy, competition is fierce. Businesses can not all sales are cash transactions, but this one is for enterprises are once again faced with the timely recovery of loan problems. Accounts receivable is difficult to recover, the possibility of forming very bad. Thus, sales of goods to provide services to reflect the cash received from business cash flow situation, from one side of reflecting the financial situation. (2) investment activities. Enterprises, investment in equipment must be updated internally, on the other hand in foreign equity, debt and other investments. Investment paid large sums of cash, ability to obtain the corresponding expected cash return, need the cash flow statement of cash flows from investing activities to understand. Therefore, the cash flow from operating, investing and financing fully reflect three different aspects of the enterprises cash flow situation, contribute to the financial situation of the enterprise objective assessment. 3. Reflect the corporate solvency and ability to pay Traditional financial analysis, the people under the assets and liabilities and a profit to analyze the solvency. In fact, enterprises, the real can be used to repay the debt in cash. Comparison of cash flow and debt to better reflect the companys repayment ability. Generally by calculating th