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It is an additional information to user of financial statement. Exhibits flow of incoming and outgoing Cash Assesses ability of the enterprise to generate cash and utilize the same. A tool for assessing liquidity and solvency of the enterprise.
inflow in operating activity For other than financial enterprises it is inflow from Investing activity. Dividend paid is always classified as financing activity Effect due to changes in exchange rates to be shown separately as reconciliation. Unrealised gains/losses from changes in exchange rates are not cash flows.