Cash flow helps understand
company’s stabilities and instabilities. Positive cash flow mean bonuses that
can be shared with stockholders and employees. If the company has lower debts,
it can expand or explore other markets. Cash flows tell if the company is
getting income or fading away in debts. It follows company’s income and
expenses under a short period of time. It is measured in three different ways.
Economic Cycle
Describe company’s
incomes, customers, short-term debts and warehouse.
Investment Cycle
It is acquisition of
fixed assets and other type of investments.
Financial Cycle
It is about emission,
long loans, dividend or amortization of debts
Cash flow is all about addition and subtraction to understand
economic-, investment-, and financial-cycle that helps
apprehend how the company develops, and its ongoing process. It also helps with
knowing whether or not to expect profit in the future. This help comprehends
how the company works from a deeper perspective.
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