Statement of Cash Flows and financial analysis: The case of a multinational company in Mexico

The statement of cash flows, based on the financial information standard (NIF) B-2, issued by the Mexican Council of Financial Information Standards (CINIF, whose objective is to present to users, the generation and application of cash for activities of operation, investment and financing The analysis of cash flows, the application of methods and techniques of analysis to the basic financial statements as a whole, provide relevant information about operational and financial strengths and weaknesses of an economic entity. In the case presented by a Mexican multinational company, the financial statements as of December 31, 2018, 2017 and 2016 are analyzed, using vertical and horizontal techniques, determining the generation and use of cash flows, financial ratios, percentages and trends. the statement of cash flows in conjunction with the statement of financial position, statement of comprehensive income and the statement of variations in stockholders' equity, they provide relevant information about the financial situation of an economic entity; and thus identify the reasons that explain the aspects of liquidity, leverage, profitability, activity and coverage, having more elements of judgment that allow it to support decision making.