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

Question

Quizplus · Accepted Answer

The operating activities section is the most important section of a statement of cash flows as it provides information about the cash generated or used in the company's core business operations. This section helps investors and creditors understand the company's ability to generate cash from its ongoing operations and assess its liquidity and financial health. Additionally, this section also provides insights into how the company manages its working capital, such as accounts receivable, accounts payable, and inventory, which are key components of the company's financial management.

The Most Important Section of a Statement of Cash Flows