![]() ![]() ![]() Through the analysis of statement of cash flow, a business can get insight into the reason why overdraft still exist in the company’s statement of financial position (balance sheet as it is formerly called).Įxplanation of the reason behind behaviour of certain variables in the financial statement: this is similar to the point explained above. This will help determine the business risk and financial risk of a business. Determining the capital structure of a business and why overdraft exists even while a company is making profit: it is useful to understand the components of a business’ finance structure.
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