Which of the following is NOT correct?The statement of cash flow helps in assessing a company’s ability to:You Answered Obtain external finance Correct Answer Operate efficiently Meet financial commitments as they fall due Fund changes in nature/scope of its activities
Question
Which of the following is NOT correct?The statement of cash flow helps in assessing a company’s ability to:You Answered Obtain external finance Correct Answer Operate efficiently Meet financial commitments as they fall due Fund changes in nature/scope of its activities
Solution
The statement that is NOT correct is "The statement of cash flow helps in assessing a company’s ability to Operate efficiently". While the statement of cash flow does provide information about a company's liquidity and solvency, and its ability to change cash flows in future circumstances, it does not directly assess a company's operational efficiency. Operational efficiency is typically assessed through other financial metrics and ratios, such as the operating margin or the return on assets (ROA).
Similar Questions
The statement of cash flows is a financial statement that shows ______.
A statement of cash flows is needed because:Group of answer choicesit enables users to understand more clearly the entity's sources and uses of cash.accrual-based financial statements are historic.accrual-based financial statements are not accurate.none of the options are true.
Which of the following is NOT a situation when it would be important to analyze cash flow information because net income is NOT giving an accurate portrayal of the economic performance of the company?When a company is growing rapidlyWhen a company has several large non-cash expensesWhen a company has a negative operating cash flowWhen a company is striving to present a stellar financial record
The Statement of cash flows helps management, investors, creditors and other interested parties evaluate the following about the entity (choose all that apply):Group of answer choicesCash investing and financing transactions for the periodExplains the difference between profit and net cash provided (used) by operating activitiesAbility to pay share dividends and meet obligationsAbility to generate future cash flows
On the statement of cash flows activities from operations include ______.Multiple choice question.cash incurred by taking on or repaying business debtcash used in or provided by the firm's investment activitiescash received or spent on long term assetscash transactions associated with running the business
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.