If an investor wants to know how much cash the company generated and spent during the year, the main financial statement they should look at is the:
A) balance sheet.
B) statement of retained earnings.
C) income statement.
D) statement of cash flows.

Question

Quizplus · Accepted Answer

The statement of cash flows shows the cash generated and spent by a company during a specific period of time, including operating activities, investing activities, and financing activities. Therefore, it is the best choice for the investor who wants to know the company's cash flow. The balance sheet shows the company's assets, liabilities, and equity at a specific point in time, while the statement of retained earnings shows changes in the company's earnings that are retained and not distributed as dividends. The income statement shows a company's revenues, expenses, and net income during a specific period, but it does not provide information about cash flow.

If an Investor Wants to Know How Much Cash the Company