Why are cash flow statements considered to be an important part of business accounting information?
submitted by malvin bvukumbwe

tuna

Cash flow statements are important because they tell you if a business has enough cash to keep running. That's a good basic piece of information you'd need, like the fuel gauge on a car.

Even if a company shows a profit on the income statement, it might not have enough cash on hand. So, the cash flow statement helps you see if the business is actually okay financially.

poor_you

I'd say they're essential because they show how money moves in and out of a business. It helps owners and investors understand whether the company can pay its bills, invest in growth, or needs additional funding. It gives you an idea of liquidity, which is important for keeping the lights on.