Creditors look at the balance sheet to see whether the company:   Multiple Choice   is profitable.   owns enough assets to pay what it owes to creditors.   has had a positive cash flow from operations.   is paying sufficient dividends to stockholders.

Comment critically on the following statement:   ‘Equity only increases or decreases as a result of the owners putting more cash into the business or taking some out.’

6. Help me selecting the right answer. Thank you

S 4. Cash flows "Cash Is King" for all businesses You can determine a company's cash situation by analyzing the cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets. Which of the following is true for the statement of cash flows? It reflects revenues when earned. It reflects cash generated and used during the reporting period.