What method is used for cash flow analysis in PCMCS?

The method used for cash flow analysis in PCMCS focuses on tracking cash inflows and outflows. This approach provides a comprehensive view of a company's liquidity, enabling an understanding of how cash is generated and spent over a specific period. By monitoring these cash movements, businesses can assess their financial health, plan for future expenses, and ensure they have sufficient cash to meet obligations.

Cash flow analysis is critical for effective financial management within the PCMCS framework. It allows organizations to forecast cash needs, manage working capital more effectively, and make informed investment decisions. This method directly aligns with the overarching goals of cost management and profitability, helping to identify areas where cash management can be improved for better financial performance.

The other methods mentioned—assessing fixed asset values, evaluating sales forecasts, and calculating depreciation—do not specifically focus on cash flow analysis. While they play a role in overall financial planning and forecasting, they do not provide the detailed tracking of cash movements that is essential for understanding a company’s cash position.