Week 4 Summary

This week was very informative. We focused on the statements of cash flow and I learned that this report is very important to both internal and external users as it gives a more detailed account of the flow of cash for an organization as it relates to cash receipts, cash payments, and change from operating, investing, and financing activities. This report gives a better understanding if whetheran organization can generate cash, has the abilitytomeet obligations, or pay dividends. We also covered how ratiosare used to evaluate financial statements as it relates to liquidity (measures short-term ability to pay obligations and the need for cash), profitability (measures the income or operating success), and solvency (measures the ability to survive).