Published Paper Details:

Financial Decisions are taken on the availability of cash, i.e.., inflow and outflow of cash. Cash flow statement is a depiction of inflow and outflow of cash and by classifying these cash flows in three activities operating, financing, and investing activities. The paper provides various suggestions to improve the format of the cash flow statement. It highlights the importance of having common-size cash flows statement based on as a percentage of sales revenue or total assets basis for period of 5 to 7 years. The other main suggestion is to make direct method mandatory for finding out cash flows from operating activities. Paper emphasizes the incorporation various cash ratios in the format of cash flow statement. The retail/small investors (whose participation has increased in the capital market) will get better reliable, precise, useful, and meaningful information from the revised cash flow statement for taking investment decisions for investing in the company. Hence, it has become an essentiality to revisit the existing format.