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Describe the Objectives of Cash Flow Statement.

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Cash Flow Statement : 

A Cash Flow Statement is a Statement Showing Inflow and Outflow of Cash and Cash Equivalents from Operating , Investing and Financing Activities of a Company during a Specific Period. It indicates the Sources from which Cash is Generated and also the Uses to which Cash is Put In .

Preparation of Cash Flow Statement : 

It should be prepared and reported by the Indian enterprises as per AS-3 (Revised) issued by the Institute of Chartered Accountants of India. 

Main Objectives of Preparing Cash Flow Statement : 

(i) To Ascertain the Sources (Receipts) of Cash and Cash Equivalents from Operating, Investing and Financing Activities of the Enterprise . 

(ii) To Ascertain the Applications (Payments) of Cash and Cash Equivalents Under Operating, Investing and Financing Activities of the Enterprise .

(iii) To Ascertain the Net Change in Cash and Cash Equivalents i.e. The Difference between Sources and Applications, Under the Three Activities between the the Dates of Two Consecutive Balance Sheets. 

(iv) To Highlight the Major Activities that have Provided Cash and that have Used Cash During a Particular Period and to Show Their Effect on the Overall Cash Balance . 

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