When used effectively, a cash flow statement provides a small business owner with a well-respected and accepted means of displaying the ability of the company to meet its financial obligations.

Question

Quizplus · Accepted Answer

A cash flow statement is a crucial financial statement that shows the inflow and outflow of cash from operating, investing, and financing activities. By analyzing a cash flow statement, a small business owner can assess their company's financial health, liquidity, and cash flow management skills. This information provides a valuable insight into the company's ability to pay off its debts, fund investments, and maintain its ongoing operations. Therefore, a cash flow statement is an essential tool for measuring a company's financial viability and sustainability.

When Used Effectively, a Cash Flow Statement Provides a Small