Curious George Enterprises, a manufacturer of high tech surveillance equipment, has experienced significant financial growth in the last 4 years and would like to expand. During this time period, cash flow has also increased steadily. The company’s president, whose background is in sales, looked at the statement of cash flows at the last meeting and would like to understand more about the details of the statement of cash flows.
Explain the purpose of the statement of cash flows. Identify the methods of reporting cash flow and the various types of activities and transactions that affect cash flow. Assuming cash flow continues to increase, explain whether there are circumstances in which you would not be willing to expand in spite of the increase in cash flow.