Q. How will you interpret the cash flow statement , if :
Opening balance of cash & Cash equivalent = Rs. 5,074
Cash flow from operating activities = Rs, 2,269
Cash flow from investing activities = Rs 1,221
Closing balance of cash & Cash equivalent = Rs. 857.
Cash flow from financing activities= Rs. 5,265
|Net Cash Flow = Closing - Opening Cash||(857 - 5074)||(4,217)|
Since the company is making cash losses and funding its cash requirements from Finance, it is indicating the bad health of the company.
Therefore Company is not working efficiently and needs to improve more in order to increase cash profits and cash flow from operating activities.
Please note that as the specific transactions in particular activities are not known, the above judgment is based on assumption that company is working under normal conditions.