One of the benefits of the statement of cash flows is that it helps users evaluate financial flexibility. Which of the following explanations is a description of financial flexibility?
A) The nearness to cash of assets and liabilities.
B) The firm's ability to respond and adapt to financial adversity and unexpected needs and opportunities.
C) The firm's ability to pay its debts as they mature.
D) The firm's ability to invest in a number of projects with different objectives and costs.

Question

Quizplus · Accepted Answer

Financial flexibility refers to a company's ability to respond and adapt to financial adversity and unexpected needs and opportunities.

One of the Benefits of the Statement of Cash Flows