Equivalents example sentences

This information is useful in providing users of financial statements with a basis to assess the ability of the enterprise to generate cash and cash equivalents and the needs of the enterprise to utilise those cash flows.A cash flow statement provides information about the historical changes in cash and cash equivalents of an enterprise by classifying cash flows into operating, investing and financing activities.' As stated earlier cash flow statement provides information about change in the position of Cash and Cash Equivalents of an enterprise, over an accounting period.This helps the users of cash flow statement to assess the impact of these activities on the financial position of an enterprise and so also on its cash and cash equivalents.Hence, purchase of marketable securities or short-term investment which constitutes cash equivalents is not considered while preparing cash flow statement.This statement is usually prepared by companies which comes as a tool in the hands of users of financial information to know about the sources and uses of cash and cash equivalents of an enterprise over a period of time from various activities of an enterprise.Cash flow information is useful in assessing the ability of the enterprise to generate cash and cash equivalents and enables users to develop models to assess and compare the present value of the future cash flows of different enterprises.As per AS 3, cash flows exclude movements between items that constitute cash or cash equivalents because these components are part of the cash management of an enterprise rather than part of its operating, investing of financing activities.A Cash flow statement shows inflow and outflow of cash and cash equivalents from various activities of a company during a specific period.Thus, cash equivalents refer to such investments that are held for the purpose of meeting short-term cash commitments rather than for investments or other purposes.Cash management includes the investment of excess cash in cash equivalents.The aggregate of the net cash flows (or use) is worked out and is shown as, Net Increase Decrease in cash and Cash Equivalents' to which the amount of 'cash and cash equivalent at the beginning' is added and thus the amount of 'cash and cash equivalents at the end' is arrived at as shown in Figureure This figureure will be the same as the total amount of cash in hand, cash at bank (or overdraft) and cash equivalants (if any) given in the balance sheet (see Illustrations 7 to 10).Similarly, short-term marketable securities which can be readily converted into cash are treated as cash equivalents.There is also a third important financial statement known as Cash flow statement, which shows inflows and outflows of the cash and cash equivalents.As per AS-3, investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents.