Information about a company's operating capability may be helpful to external users in
A) assessing the uncertainty of its future cash flows.
B) evaluating the timing of cash flows in the near future.
C) evaluating the efficiency with which the company uses its resources to generate revenue.
D) assessing a return of investment as well as a return on investment.

Question

Quizplus · Accepted Answer

Evaluating the efficiency with which the company uses its resources to generate revenue is directly related to understanding a company's operating capability, as it reflects how well the company is managing its operations to produce income.

Information About a Company's Operating Capability May Be Helpful to External