Monitoring cash flow is important because it measures a company's ________.
A)short-term financial health and financial efficiency
B)future needs for equipment
C)long-term financial health and financial efficiency
D)total assets

Question

Quizplus · Accepted Answer

Monitoring cash flow provides information about a company's ability to pay its short-term obligations and manage its daily operations. It measures financial efficiency by determining how effectively a company is generating and using cash to run its business. It does not provide information about future equipment needs, long-term financial health, or total assets.

Monitoring Cash Flow Is Important Because It Measures a Company's