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Cash flow statements are used for various purposes and some of them are as follows: Firstly, it is used to provide information about the solvency and liquidity of the firm. Secondly, it gives the idea about the changes in the cash flow in future. Thirdly, cash flow statements provide information about the evaluation changes in the assets, equity and liabilities. Fourthly, it can be used to compare the operating performance of various firms in different fiscal years. Moreover, it indicates the amount, timings and the probability of the cash flows which the form expects to collect.
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