Cash Flow Analysis
About This Chapter
Chapter 14 begins our review of the investment value section by describing the three financial statements and then focusing on the statement of cash flows. All three statements are important because it is possible to be immensely profitable and yet go bankrupt; entrepreneurs must plan carefully to avoid such catastrophes.
Thus, in this chapter, we explore how financial statements should be constructed to assess the equity value of an organization as well as the extent in which it is earning profits and cash flows. We also address differences between operating, investing, and financing cash flows and describe how to calculate them by utilizing balance sheet and income ...