Final answer:
A balance sheet is an accounting tool that lists a company's assets and liabilities. While it is useful for many purposes, it is not typically used for determining free cash flows.
Step-by-step explanation:
A balance sheet is an accounting tool that lists a company's assets and liabilities. It is used to determine the financial position of a company at a specific point in time. While balance sheet information is useful for many purposes, it is not typically used for determining free cash flows.
Free cash flow is a measure of how much cash a company generates after accounting for its operating expenses and capital expenditures. It is calculated by subtracting the company's capital expenditures from its operating cash flow. Free cash flow is more commonly calculated using the company's cash flow statement, which provides a more detailed picture of the company's cash flow activities.
Therefore, while a balance sheet provides valuable information about a company's assets and liabilities, it is not the primary source for determining free cash flows.