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A Cash Flow statement is vitally imortant to have a clear understanding about the organization. It gives insight into the cash generating ability of the organization. It also shows the company's ability to pay it's debts, payment of dividend to shareholders and ability to invest in feasible investment projects.
Positive Cash In-Flows shows that the compny is not only reporting profits in the income statement but it is really making money. It shows the viability of a company and it's ability to continue as a going concern.
Cash flows also show that the company will be able to maximize the wealth of the shareholders.
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