HD Faculty™ requires that its accounting team conducts an empirical study of its cash flow statements, from time to time, to provide averages and to determine if the potential exists to develop benchmarks for the ratios. One of the main objectives is, to ensure that there is no lack of cash flow data that are required by HD Faculty™ and/or its stakeholders and analysts in assessing HD Faculty™'s performance, liquidity, solvency, financial flexibility and operating capability.

Performance. A properly prepared cash flow statement enhances the ability to evaluate with the aim to improve HD Faculty™'s performance. Conceding this, the finance and accounting team has been mandated to ensure that HD Faculty™'s cash flow statements are prepared to answer questions concerning quality of earnings, sources of cash from operations, how debt repayments are being made, and reliance on external financing on questions such as:

•

Was the strength of internal cash flow generation positive or negative?

•

Were short-term financial obligations such as interest payments met with operating cash flows?

•

Did HD Faculty™ have excess cash flow after making capital investments?

Prime Purpose. The primary purpose of HD Faculty™'s cash flow statement is to assess HD Faculty™'s liquidity, viability and financial adaptability. The designated team is required to ensure that the cash flow ratios are developed to serve the objectives set out in the statement of cash flow, which is to assess:

•

The ability to generate future positive net cash flows from its operating activities.

•

The ability to generate revenue from investing activities.

•

The ability to meet its obligations on financing activities and pay dividends.

•