Brighton Pebbles Ltd Essay Example | Topics and Well Written Essays - 500 words

Brighton Pebbles Ltd - Essay ExampleThe sum up or simplification in the property is important in the sense that it clearly established where the money i.e. cash has been utilised. If we analyze a cash flow statement of any firm, we will notice that it is divided into triple different parts i.e. operations, invest and financing. The operating activities section mentions the movement of cash flows into those areas which are mostly related to with the generation of get therefore this section of the cash flow clearly indicates the increase or decrease of cash flows into those activities which can be attributed to the earning of profit therefore the movement or increase of decrease of cash into those areas define how much cash has been spent or earned in those activities. This is more significant than profit and loss because profit and loss changes do not indicate whether and how the money has been spent into operating activities. Similarities, increase or decrease of cash into the investing activities suggest the actual cash outlay been made into investing activities made by the firm. It also further indicates that the cash put into investing activities would clearly define how and where the enthronization have been made and in what quantity- changes and profit and loss do not indicate such cultivation to the shareholders.