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Write a short note on cash flow analysis. |
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Answer» Cash flow analysis concerned with the preparation of cash flow statement which shows the inflow and outflow of cash and cash equivalents in a given period of time. Cash includes cash in hand and demand deposits with banks. Cash equivalents denote short term investments which can be realised easily within a short period of time without much loss in value. Cash flow analysis helps in assessing the liquidity and solvency of a business concern. |
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