Preparing Cash Flow Statements

Abstract

The long-term survival of any business depends on its ability to generate cash from its main trading activities. Although it can raise money by borrowing or by selling additional shares there is a limit to the amount of capital that can be financed from outside sources. The same is true of asset disposals. Although selling fixed assets raises cash there is a limit to the number which can be sold before it affects the firm’s trading and profitability.