One of the purposes of the statement of cash flows is to ________.
A) determine the operating income of a business
B) to calculate inventory turnover
C) evaluate the level of debt and leverage of a company
D) predict the ability of a company to pay debts and dividends

Question

Quizplus · Accepted Answer

The statement of cash flows helps to predict the ability of a company to pay debts and dividends by showing the sources and uses of cash in operating, investing, and financing activities during a specific period of time. It does not determine operating income, calculate inventory turnover, or evaluate the level of debt and leverage of a company.

One of the Purposes of the Statement of Cash Flows