Excerpt from :

...... FASB No. 95 requires several cash flow measurements. These include: cash flow statements, cash flow from operations, cash flow from investments, and cash flow from financing. There are two methods for reporting cash flow from operations the direct and the indirect method. The direct method reports inflows of cash and outflows from payment of expenses. The indirect method which begins with the net income number, a mixture of cash (e.g. Cash proceeds from sales) and non-cash components (e.g. Depreciation) and removes non-cash or accrual items, then adjust for the cash effects of transactions not yet reflected in the income statement (e.g. cash payments for inventory not yet sold) (Sprague, 2008, p. 2)
There are a variety of challenges that organizations may face with cash flow management. Running short on cash often means the utilization of credit, according to Sprague (2008). There may be a lag between when expenses need to be paid and revenues are received, therefore setting realistic revenue receipt expectations is important. Cash flow projections are only what is estimated to be received and when. For this reason, strategies must be put into place to maximize the efficiency and efficacy of cash flow management......

Need this essay? If it's not quite what you're looking for there are over 50,000 more to search from, so you can find the term paper or essay that meets your needs.