The statement of cash flows is used to assess a company's long-term solvency.

Question

Quizplus · Accepted Answer

The statement of cash flows is primarily used to assess a company's short-term liquidity and its ability to generate cash to meet its operating and financing activities. While it can provide some insight into a company's long-term solvency, other financial statements and ratios are more commonly used for this purpose, such as the balance sheet and debt-to-equity ratio.

The Statement of Cash Flows Is Used to Assess a Company's