Common uses of the statement of cash flows include all but which of the following?

a. Management prediction of future cash flows for decision making.

b. Investor assessment of cash flows before buying and selling stock.

c. Creditor evaluation of a company's ability to generate cash to cover debt.

d. Government assessment of whether company is able to pay taxes as they become due.

e. Management determination of the specific sources and uses of cash.

Question

Rory Mcfarland

Business

3 March, 10:01

Common uses of the statement of cash flows include all but which of the following?

a. Management prediction of future cash flows for decision making.

b. Investor assessment of cash flows before buying and selling stock.

c. Creditor evaluation of a company's ability to generate cash to cover debt.

d. Government assessment of whether company is able to pay taxes as they become due.

e. Management determination of the specific sources and uses of cash.

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Answers (1)

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Slade Dyer · Answer 1

Answer: Option D

Explanation: Cash flow statement is a type of financial statement which shows the sources and uses of cash for a specified period in the form of cash inflows and outflows.

Cash flow statement is used by the management to evaluate the performance and for making plans for future. It is also used by potential investors for evaluation purposes.

Government do not need cash flow to asses ability of the company. The tax obligation on a company is calculated on its income which is shown by other financial statements like income statement.