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Why is a cash flow statement important?

By Kate Swindlehurst - Mar. 13, 2023

A cash flow statement is important because it measures the cash position of a business. It shows how a business spends its money. It is a valuable resource that measures the strength, profitability, and long-term future outlook of a company.

Obviously, having finances in order is crucial for the success of a business. Cash flow statements give insight into how a business is spending its money, which is important for both short-term and long-term planning.

While the information can be important for insight into planning, it is also important as it can give insight into ways to increase cash flow. This can be done by seeing where unnecessary spending is happening. From there, a company can make alterations to improve how they speed their cash.

Why is a cash flow statement important?
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