When evaluating the statement of cash flows, which of the following statement(s) is/are true?
A) Negative cash flow could be a result of investments in new fixed assets or inventory.
B) Cash expenditures used to expand the firm could drain cash during expansion periods.
C) Can assist financial professionals in identifying where cash is generated and dispersed.
D) All of the above.

Question

Quizplus · Accepted Answer

All the statements are true regarding the evaluation of the statement of cash flows. Negative cash flow can indeed result from investments in new fixed assets or inventory (A), cash expenditures for expansion can drain cash during those periods (B), and the statement of cash flows is a crucial tool for financial professionals to understand where cash is coming from and where it is going (C).

When Evaluating the Statement of Cash Flows, Which of the Following