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

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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

One of the purposes of the statement of cash flows is to ________.

A	to calculate inventory turnover
B	predict the future ability of a company to pay debts and dividends
C	evaluate the level of debt and leverage of a company
D	determine the operating income of a business

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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