Custom Search

(137)-THE ADVANTAGES OF CASH FLOW ACCOUNTING

Friday, March 26, 2010

The Advantages of Cash Flow Accounting

Some of the advantages of cash flow accounting are as follows,
  • Survival in business depends on the ability to generate cash. Cash flow accounting directs attention towards this critical issue.
  • Cash flow is more comprehensive than “profit” which is dependent on accounting conventions and concepts.
  • Creditors (long term and short term) are more interested in an entity’s ability to repay them than in its profitability. Whereas “profits” might indicate that cash is likely to be available, cash flow accounting is more direct with its message.
  • Cash flow reporting provides a better means of comparing the results of different companies than traditional profit reporting.

0 comments:

Post a Comment

About Me

My Photo
Management Consultant.
Financial management and business management specialist.
View my complete profile

WELCOME

WELCOME ALL.....................................................,

If you have any problems regarding accounting please comment in this site and let we know SURELLY WE ANSWERED...................................,