How to see the potential crisis from the financial statements?

Financial statement analysis is based on financial statements, adopts scientific evaluation criteria and applicable analysis methods, and follows standardized analysis procedures to reveal the contradictions and problems existing in the process of financial activities, so as to judge, evaluate and predict the operating conditions and performance of enterprises and provide directions and clues for managers' decision-making. This paper focuses on the analysis of the cash flow statement, and expounds how to see the crisis signal of enterprise's financial situation from the cash flow statement, so as to give full play to the early warning efficiency of the cash flow statement. A normal business enterprise should not only create profits, but also create cash income. By analyzing the source of cash inflow, we can evaluate the ability to create cash and predict the ability of enterprises to obtain cash in the future. The cash flow information revealed by the cash flow statement can make a more reliable and stable evaluation of the solvency and payment ability of enterprises from the perspective of cash. The net profit of an enterprise is calculated on the accrual basis, while the cash flow statement in the cash flow statement is based on the cash basis. Through the comparative analysis of cash flow and net profit, the quality of income can be evaluated. Investment activity is the behavior of an enterprise to invest part of its financial resources into an object in order to obtain more profits. Fund-raising activity is the behavior of enterprises to raise funds directly or indirectly according to their financial needs. The investment and financing activities of enterprises are closely related to their business activities. Therefore, the cash inflow and outflow information revealed by investment and financing activities can be analyzed in detail by combining the cash flow information generated by business activities and the net income of enterprises, so as to evaluate the investment and financing activities of enterprises. There are three main sources of cash for enterprises: cash inflow from operating activities, cash inflow from investment activities and cash inflow from financing activities. Under the condition of normal production and operation and unchanged investment and financing scale, the greater the cash inflow, the stronger the vitality of the enterprise; If the cash inflow from operating activities accounts for a large proportion of the total cash inflow, it can reflect that the enterprise is in good operating condition, with strong cash withdrawal ability, low bad debt risk and reasonable cash inflow structure; If the cash flow of an enterprise is mainly caused by the recovery of investment, or even the disposal of fixed assets, intangible assets and other assets, it may reflect the decline of the production and operation ability of the enterprise, and there are problems in its maintenance and development; If the cash inflow from fund-raising activities accounts for a relatively large proportion, it may mean that enterprises have broad financing channels and have the potential to obtain enough funds to expand the scale of production and operation.