Information on a company's cash flows is used for all of the following, EXCEPT
A) assess the company's ability to repay debt in the future.
B) evaluate the potential for the company to be able to pay dividends in the future.
C) evaluate the past performance of a company.
D) estimate the company's future cash requirements.

Question

Quizplus · Accepted Answer

Information on a company's cash flows is primarily used to evaluate the company's ability to generate cash and meet its financial obligations in the future. While it can be used to estimate future cash requirements and potential for dividends as well, it is not typically used to evaluate the past performance of a company. Other financial statements, such as the income statement and balance sheet, are better suited for that purpose.

Information on a Company's Cash Flows Is Used for All