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Summary: When preparing a cash flow statement, make sure that the statement shows whether cash is flowing up or down. Discover how cash flow statements can inform future business decisions, such as the reduction of expenses, with help from a registered financial consultant in this free video on cash flow statements.
Patrick Munro's affinity for investing and financial matters began more than 20 years ago with business education and service throughout the ranks of the banking, insurance and...read more
"This is financial advisor, Patrick Munro, talking about preparing a cash flow statement. In the business that deals in cash, a cash flow statement is affectionately known as cash is king and there's the statement to prove it. Every month a business should be well healed and well charged in how they handle their cash because it's the lifeblood of the industry that you're in. And every month you should take a snapshot of where you start with your cash and where you end with your cash and therefore, the difference between those two would show whether cash flow is going up or in fact going down. And the way to make it go up is two fold really, you can increase the sales in the company and therefore there's more cash coming in. But then you can also reduce expenses and enhance the amount of cash coming in as well by keeping the expenses low. Ideally you try to do both and that makes the business run even better. And this is a very important statement to know your cash flow statement. This is financial advisor Patrick Munro."