The statement of cash flows should help investors and creditors assess each of the following except the

Question

Quizplus · Accepted Answer

The statement of cash flows primarily provides information about a company's cash receipts and cash payments during a period, focusing on its operating, investing, and financing activities. It helps in assessing the company's ability to generate cash and cash equivalents, thereby indicating its capacity to pay dividends, explaining differences between net income and net cash from operating activities, and detailing cash investing and financing transactions. However, it does not directly assess the entity's ability to generate future income, as this involves broader considerations beyond cash flow, including market conditions, competitive position, and operational efficiency.

The Statement of Cash Flows Should Help Investors and Creditors