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Question
Write a short note on cash flow analysis?
Short/Brief Note
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Solution
Cash flow analysis is concerned with the preparation of a 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 realized 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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