It is important to analyze the sources and uses of cash because:___.

1 answer:

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It is important to analyze the sources and uses of cash because creditors use this information to assist them in deciding whether to loan funds to them. Investors use this information to decide if they will purchase their stock.

Managing your revenue is an important step to starting or investing in something.

Creditors always check and properly analyze the sources of cash before providing a loan to a lender. They do not invest in companies or people who are least likely to source and make cash in the coming time. Hence, your sources and uses shall be properly analyzed when presenting to creditors.

Investors, whenever investing in something will look at the benefits of the source they want to invest into. If a source is not likely to produce beneficiary revenue in the upcoming time, then investors will never invest in such a kind of source.

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