An increase in depreciation expense will decrease cash flows from operations.
A cash flow statement is a valuable measure of a company's strength, profitability, and long-term future prospects. CFS helps determine whether a company has sufficient liquidity or cash to pay its expenses. Businesses can use his CFS to forecast future cash flows, thus helping with budgeting.
Cash flow is defined as the amount of money that flows into or out of a business over a period of time. Cash flow is important because it allows us to meet existing financial obligations and plan for the future. Still, cash flow is a common challenge for small businesses.
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