Cash flow assessment plays a central role in analyzing the credit risk of a company.

Question

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Cash flow is a critical factor when assessing the ability of a company to meet its financial obligations, and therefore plays an important role in analyzing credit risk. Understanding a company's sources and uses of cash, as well as its ability to generate positive cash flows, helps lenders and investors evaluate the company's financial health and its ability to repay debt.

Cash Flow Assessment Plays a Central Role in Analyzing the Credit