Cash Flow Statement Singapore

Cash Flow Statement reports an entity’s true financial health with the inflows and outflows of cash over an accounting period, best used as monthly report. It logs in the actual financial transaction where the money comes and goes. There are 3 categories of cash flows, from operating activities, investing activities and financing activities.

Cash flows from operating activities specified under the events like payments made to suppliers, employee remuneration, payments received from sale of goods and services, interest payment to lenders, interest or dividends received from investment, tax payment, and mainly operating income and expenses.

Cash flows from investing activities specified under the events like buying or selling of property, plant or equipment, buying or selling of securities (stocks or bonds), and other investing income and expenses.

Cash flows from financing activities specified under the events like cash received from investors and lenders, dividends paid to shareholders, cash paid to principal loan, and other financing cash flows to the entity.

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On top of the basic understanding, Cash Flow Statement can provide entity’s management the essential finance information on whether they have capability to sustain the entity’s operation, how good are they in managing their inventory purchases, fixed and variable expenses, and how well are they in clearing their long-term and short-term debts or loans. Their management can also use this statement to understand their cash flow status in budget planning for marketing, advertising, fixed assets investing and perhaps other cash generating activities. Caution in cash flow management is crucial, as continuous negative cash flow will lead to a bigger financial problem for the entity. That statement may also provide information on how well the entity’s management uses their money to investors and lenders for their investing decision.

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This information accuracy on cash flow statement can only be realized if an entity has good bookkeeping record. Please contact us to have your bookkeeping work started today.