Creditors and investors would generally find the statement of cash flows least useful for assessing the:
A) Ability to generate future cash flows.
B) Ability to pay dividends.
C) Financial position at a point in time.
D) Quality of earnings.

Question

Quizplus · Accepted Answer

The statement of cash flows is designed to provide information about a company's cash inflows and outflows during a specific period. Creditors and investors are more interested in the financial position of the company at a given point in time, which is better reflected in the balance sheet. The statement of cash flows is more useful in assessing a company's ability to generate future cash flows and pay dividends, as well as the quality of its earnings.

Creditors and Investors Would Generally Find the Statement of Cash