Question

A firm's statement of cash flows helps its investors and creditors do which of the following?

I. Assess the firm's ability to expand its operating facilities through issuance of long-term debt.
II. Assess the reasons for any differences between the firm's net income and its associated cash receipts and payments.
III. Assess the effects of the firm's cash and noncash investing and financing transactions on its overall financial position.

A : II and III only

B : I, II and III

C : I and II only

D : I and III only

Answer 1

Assess the reasons for any differences between the firm's net income and its associated cash receipts and payments.

And also

Assess the effects of the firm's cash and noncash investing and financing transactions on its overall financial position

Step-by-step explanation:

A company's statement of cash flow is a financial record, which shows the details of the company's income and expenses around a given period.

Investors can use the cash flow statement of a company is used to know if the company would be a profitable place to invest in or not.

Creditors can use the cash flow statement to know if a company can pay up money that they loan to them.