Accrual accounting and cash flow analysis

Assignment Help Financial Accounting

Reference no: EM1375393

Accrual accounting is used in financial reporting and in analysis. Additionally, analysis often focuses on cash flows in business.

Find an example of every type of analysis using your resources. Give a high level overview of analysis and its use for each example? Do you think that one type of analysis is better? Why or why not?

Find a journal or news article that explains why both accrual accounting and cash flow analysis are required to understand a company? Briefly describe the article. What would you have added to improve the analysis?

First, I will recommend that you show the accrual accounting and its connection to cash flows concepts. As you may already know, accrual accounting is what the FASB needs in its accounting reporting standards. It is the accounting standard that dictates transactions to be identified when it occurs, and not wait until cash is collected. I would recommend that you focus your discussion on one of financial statement--CASH FLOWS STATEMENT.

Furthermore, the above directions will help you address second portion on analyzing cash flows--accounts receivable/collections; payments,
etc. Do not forget about inventory as part of the liquid assets. Should it or should it not have anything to do with incremental cash flows statements? How do all these affect current assets and current liabilities? What kind of tools can you use to analyze them? Which of these tools are better than others? In your research, focus on accrual concepts and cash flow analysis.

Referencing style- APA style

Reference no: EM1375393

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