This essay focuse on The cash flow from operations to current liabilities on statement of cash flows or funds flow. the flow of cash during the year to cover the debts due.

The cash flow from operations to current liabilities

statement of cash flows or funds flow

Two limitations exist with either the current ratio or the quick ratio as a measure of liquidity:
1.     Almost all debts require the payment of cash. Thus, a ratio that focuses on cash is more useful.
2.     Both ratios focus on liquid assets at a point in time. Cash flow from operating activities, as reported on the statement of cash flows, can be used to indicate the flow of cash during the year to cover the debts due.
The cash flow from operations to current liabilities ratio is as follows:

• In financial accounting, a cash flow statement is a financial statement. It is that shows how changes in balance sheet accounts and income. This  affect cash and cash equivalents and breaks the analysis down. It is to operating, investing, and financing activities.
• People and groups interested in cash flow statements include: (1) Accounting personne. This is 2) potential lenders or creditors, (3) potential investors, (4) potential employees. This is or contractors, and (5) shareholders of the business.
• The cash flow statement is intended to provide information on a firm’s liquidity and solvency, improve the comparability of different firms’ operating performance, and to indicate the amount, timing, and probability of future cash flows.

n financial accounting, a cash flow statement, also known as statement of cash flows or funds flow statement, is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents