Final answer:
Understanding cash flow is crucial for assessing financial health and decision-making in organizations.
Explanation:
Looking at cash flow is an essential step in a good financial plan as it provides insights into how an organization generates and utilizes cash. The cash flow statement categorizes cash flows into operations, investing activities, and financing activities, offering a comprehensive view of the financial health of the company. Analyzing cash flow helps in determining if the organization's core operations generate enough cash and if it relies heavily on cash flow from investing and financing activities.
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