Recommend an innovative way that the Statement of Cash Flow may be useful when making business decisions.

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Michael Ugulini eNotes educator| Certified Educator

One innovative way that the Statement of Cash Flow may be useful when making business decisions is the use of the statement as applies to embarking on a Guerrilla Marketing campaign. This is creative marketing that requires financial and other resources (such as human resources) and a business enterprise must be certain that they have the finances and such to conduct an aggressive Guerrilla Marketing campaign.

Businesses typically analyze their Statement of Cash Flow to help them make a host of decisions, but with Guerrilla Marketing a newer and constantly evolving concept, a company must ensure they are financially healthy to take on a short or a sustained campaign.

As innovative as a Guerrilla Marketing campaign can be, its feasibility as a business initiative still demands that a company do a thoughtful analysis of their Statement of Cash Flow. This is to ensure that they do not direct money to a campaign when they should be directing money to an investing decision, such as buying new inventory or equipment.

The Statement of Cash Flow is for determining the Cash balance figure on a company's Balance Sheet. A business can compare their current cash position to a prior period's cash position. If they are growing their cash reserves, and have met all their vital cash demands in other areas, they may want to engage in a dynamic Guerrilla Marketing campaign to further promote their business in a unique way.

The Statement of Cash Flow can give the business an indication of their ability to plan and institute a proper budget for such a marketing campaign. This is one of many innovative and creative ways that a business can perform Cash Flow analysis as a tool to make decisions to increase their sales and profitability.