9. Cash Flow Budget

One of the most useful management tools is the cash flow budget. Preparing this budget forces the manager to consider many facets of the operation. The cash flow budget draws on information that affects the balance sheet, income statement, and other reports.

A cash flow statement can be prepared as another kind of financial report. It is not found in the financial reports issued by public companies. It would contain more detail than these companies would care to reveal. A cash flow statement also probably would not be of great use to investors and analysts. It is much more valuable as a management tool.

The statement of changes in financial position tells what happened to the company’s financial resources. In the Acme Widget ...

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