The most important section of a statement of cash flows is the:
A) financing activities
B) operating activities
C) investing activities
D) all of the sections are equally important

Question

Quizplus · Accepted Answer

The operating activities section is considered the most important because it shows the cash flow from the company's core business operations. This section provides insight into the company's ability to generate cash from its regular operations, which is critical for long-term sustainability. The investing and financing activities sections are also important, but they relate to the company's investments and fundraising activities, respectively, which are not necessarily indicative of the company's ability to generate cash from operations.

The Most Important Section of a Statement of Cash Flows