A statement of cash flows allows a financial analyst to determine
A) whether a cash dividend is affordable.
B) how increases in assets have been financed.
C) whether long-term assets are being financed with long-term or short-term financing.
D) All of the options

Question

Quizplus · Accepted Answer

A statement of cash flows provides information on the sources and uses of cash during a particular period, including operating activities, investment activities, and financing activities. This information is useful for determining whether a company has enough cash to pay dividends, how increases in assets are being financed, and whether long-term assets are being financed with appropriate long-term or short-term financing. Therefore, all options are correct.

A Statement of Cash Flows Allows a Financial Analyst to Determine