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Cash Flow Statement Analysis - Essay Example

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It shows the source of cash and the use of cash. It assesses the amount, timing, as well as predictability of cash outflows and cash inflows (Kapil,…
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Operating activities are the main activities of the business because they reflect the underlying health of the company. It reflects the money that comes into and leaves the firm that is associated with the ordinary activities of the company (Warren, et al. 2012).
Based on the above analysis of operating activities of the five companies, it is clear that Emaar Properties PJSC is the best performing firm because it generates most of its income from its primary activities compared to the remaining four. This implies that Emaar Properties PJSC is putting more emphasis on its core activities than the other companies hence more income from operating activities. Additionally, it shows that the operating activities of the company are more vibrant than the other firms. At 63.72%, Emaar has a good performance because its primary activities generate more than half of the total revenue.
The second company, Deyaar PJSC Development, also has a good performance because it generates most of its income from its core business activities. The third company, Drake & Scull International PJSC, is also performing well because it has a positive net cash flow from operating activities. The third and fourth positions are taken by Arabtec Holding PJSC and Al Mazaya Holding respectively.
From the analysis, it is clear that all the companies are good investments and the investors will be willing to invest in any of them because they produce a net positive cash flow from operating activities (Kapil, 2011). This implies that all the companies are putting more emphasis in their core activities thus more income from operating activities. However, investors would prefer Emaar because it generates more cash from their core business activities.
The net cash flows from investing activities largely reflects the amount of cash associated with the sale and purchase of long-term business investments (capital expenditures) like assets, property, securities and equipment.
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