Statement of financial position information is useful for all of the following except
A) assessing a company's risk
B) evaluating a company's liquidity
C) evaluating a company's financial flexibility
D) determining free cash flows.

Question

Quizplus · Accepted Answer

The statement of financial position provides information about a company's assets, liabilities, and equity, which can be used to assess a company's risk, liquidity, and financial flexibility. However, free cash flows are calculated using information from multiple financial statements, including the statement of cash flows, income statement, and statement of financial position. Therefore, while the statement of financial position is a helpful starting point for calculating free cash flows, it alone does not provide all the necessary information.

Statement of Financial Position Information Is Useful for All of the Following