According to the textbook, the most important function of the pro forma statement of cash flows is to project whether the firm will have sufficient:
A) income to meets it payroll on a weekly or monthly basis
B) income to exceed industry norms
C) cash to meet its needs
D) inventory to meet its sales and production forecasts
E) short term assets to cover its short term liabilities

Question

Quizplus · Accepted Answer

The pro forma statement of cash flows helps project whether the firm will have sufficient cash to meet its needs, which includes paying bills, purchasing inventory, and other expenses. It is important to monitor cash flow to ensure the company stays solvent and can continue to operate effectively.

According to the Textbook, the Most Important Function of the Pro