THE IMPORTANCE OF CASH FLOW IN UNDERLINING COMPANIES FINANCIAL POSITION

Abstract

Cash-flow analysis involves the movement of cash into and out of the business in order to determine the company behavior regarding actions that create and those who consume cash in a business cycle. In this article is presented the importance of cash flow in making long or short term decisions that lead to a healthy business growth. Movements of cash from activities illustrates a growth or reduction of cash in a certain period of time. Forecasting cash flow is useful to both managers managing company finances and banks to base lending decisions

Keywords

• cash flow
• indirect method
• lending decisions
• creditor