What Are The Advantage And Disadvantage Of Cash Flow Statement?

Mention and explain 5 disadvantage  of cash flow   statment

Cash flow refers to the different methods of investing, acquiring, borrowing, earning and spending cash or its equivalent in order to run an enterprise. This is done by breaking down during an operating cycle of an entity exactly how it acquired the new purchases of inventory and asset acquisitions (Balance Sheet Assets). How it may have, how it has handled it's liabilities by either increasing them for purchases or paying down the debts of a prior period (Balance Sheet Liabilities). How it has earned revenue (Income Statement Revenues), What it cost to generate the revenues (Income Statement Expenses) and what was earned by the company during the period and how much cash or its equivalent is left at the end of the period. This is not the complete and detailed version but a general explanation of what is cash flow and how a budget for cash flow would be approached.

Cash flow statements will help show over a period of time whether the company is operating at a loss or profit, helps to better determine where to cut costs in order to raise profit margin.. You know a company is in trouble when they start to issue memos about stationary waste, this is first sign

Advantages: You will be able to work out how much money will come in and go out, so you can find out if the business will be successful and worth starting
It helps let them set goals and make future plans for their business
There are less accounting methods applied to cash flows as compared to balance sheet numbers
Disadvantages: It doesn’t not give an accurate facts about the money coming and out, costs may change and this could cause the business to loose money
Calculations could have been added wrong, and this could cause the business to be spending money they don’t have causing debt.

Describe the main advantages of budgeting