Together with the cash flow statement, the income statement enables the investors to determine the rate of return the company is generating relative to the amount of capital invested.

Question

Quizplus · Accepted Answer

The statement that enables investors to determine the rate of return relative to the amount of capital invested is the return on investment (ROI) or return on equity (ROE) calculations, which typically involve data from both the income statement and the balance sheet, not the cash flow statement. The cash flow statement is used to assess the liquidity and financial flexibility of the company.

Together with the Cash Flow Statement, the Income Statement Enables