Question

Let’s say I could only look at 2 statements to assess a company’s prospects – which 2 would I use and why?

a. Cash flow statement
b. Income statement
c. Balance sheet
d. Statement of retained earnings

Answer 1

The two most important statements to assess a company’s prospects are the cash flow statement and the income statement.

Step-by-step explanation:

If you could only look at 2 statements to assess a company’s prospects, the two most important statements to consider would be the cash flow statement and the income statement.

The cash flow statement provides information about how much cash a company is generating and how it is being used. It helps to evaluate the company's ability to generate cash and meet its financial obligations.

The income statement shows a company's revenues, expenses, and net income. It measures the company's profitability over a specific period of time.