The section of the statement of cash flows that is generally considered to be the best measure of a company's ability to continue as a going concern is
A)Cash flows from financing activities
B)Cash flows from investing activities
C)Cash flows from operating activities
D)Each gives an equal estimation

Question

Quizplus · Accepted Answer

Cash flows from operating activities provide information about a company's ability to generate cash from its core business operations, which is crucial for its long-term survival and ability to continue as a going concern. This section of the cash flow statement shows how much cash a company has generated or used in its core operations, such as sales and production, and is therefore the best measure of its ongoing financial health. Cash flows from financing and investing activities provide important information as well, but they are less indicative of a company's ability to continue operations as they relate primarily to debt and equity transactions and non-operating investments.

The Section of the Statement of Cash Flows That Is