Management could use the statement of cash flows to determine whether short-term financing is necessary to pay current liabilities.

Question

Quizplus · Accepted Answer

The statement of cash flows provides information about the company's cash inflows and outflows, including changes in current assets and liabilities. By analyzing this information, management can determine whether there is enough cash on hand to pay current liabilities or if additional short-term financing is needed.

Management Could Use the Statement of Cash Flows to Determine