Question
Asked Jan 23, 2020
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Describe the usefulness and format of the statement of cash flows.

 

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Expert Answer

Step 1

Statement of cash flows:

Statement of cash flow is a financial statement that shows the cash and cash equivalents of a company for a particular period of time. It shows the net changes in cash, by reporting the sources and uses of cash as a result of operating, investing, and financing activities of a company.

Step 2

Describe the usefulness of statement of cash flows.

The statement of cash flows is useful as it gives information to the users of financial statements like investors, creditors about the:

  • Ability to generate future cash flows for the company.
  • Ability of the company...

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