What Does The Cash Flow Statement Communicate To Stakeholders?
Answer Of Multiple Choice Question (MCQ) The correct answer is (A). as Statement Of Cash Flows shows the sources of cash and utilization of these sources for cash receipts (Inflows) and cash payments (Outflows). Sources of cash include Cash From Operating Activities, Investing Activities and Financing Activities. Cash from Operating Activities shows that how much cash is generated and spent from operations such such as change in working capital. Cash from Investing activities shows that how much cash is received and paid from the purchase and sale of Non Current Assets and Marketable Securities. Cash from Financing Activities shows how much cash inflows and outflows the issuance of shares, payments of dividends, etc. A stakeholder may be interested in knowing about how much the cash is investing in the business and how much the company has cash in hand to give fair return to its investors on their invested amount of money. For example a creditor is interested in knowing whet...