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cash flows give a reflection of cash position that other accounting statements cannot give. They are indeed useful in helping the managers, creditors, and investors to determine the current value of the company as well as company’s ability to meet its current financial obligations; in addition, it enables to calculate an entity’s present liquidity. The financial profits do not necessarily mean an entity is liquid. Furthermore, it helps the management to develop the internal rate of returns and net present values to use in financial models for running the company (Wild, 2015).
