A statement of cash flows allows a financial analyst to determine

Question

Quizplus · Accepted Answer

The statement of cash flows provides information on how cash is generated and used during a specific period, including cash flows from operating activities, investing activities, and financing activities. This information can be used to determine whether a cash dividend is affordable (by looking at the cash flow from operating activities), how increases in asset accounts have been financed (by looking at the cash flow from investing activities), and whether long-term assets are being financed with long-term or short-term financing (by looking at the cash flow from financing activities).

A Statement of Cash Flows Allows a Financial Analyst to Determine