First part:

While the income statement discloses revenues from operations and what it costs to generate those revenues for the operating period, it does not reflect how much cash was actually collected and how it was spent. This is one of the reasons many investors and decision makers within a company will look to the cash flow statement to assess the sources and uses of cash. As you go through the lessons consider the following:

  1. How can management use data from the cash flow statement to improve its management of cash?
  2. As an investor, how will you use information from the cash flow statement?
  3. How can management use the knowledge about the company’s operating cycle and data from the cash flow statement to control cash?

Second part:

1.)What are the limitations of using financial ratios and how can management maximize the use of financial ratios?