A loan officer at Bigbux Bank is considering a loan application from Portable Pet Care, Inc. He is concerned about the company's ability to make payments on the loan. The loan officer is likely to be interested in Portable Pet Care's statement of cash flows.

Question

Quizplus · Accepted Answer

Firms must manage cash flows carefully to ensure they have enough cash to pay debts as they come due. The statement of cash flows can help the loan officer determine if the firm is managing its cash inflows efficiently.

A Loan Officer at Bigbux Bank Is Considering a Loan