The uses of cash flow statement are as follows:
• It is useful for short term financial planning about inflows and outflow of cash
• It helps in analysing the reason for the change in cash and cash equivalent balances of a company
• It assists in determining and assessing liquidity and solvency positions of a company.
• It enables to analyse and study the trends of receipts and payments of cash from various activities of a company and thereby helps in drafting various policy measures and short term planning.
• It enables the segregation of cash flows from operating, investing and financing activities of the business separately.
• It assists in making decision about distribution of profit with reference to the availability of cash.
