Planning the repayment of loans and replacement of fixed assets
Projecting the profits of the business in the long run
Detecting the causes of poor cash position inspite of substantial profits
Evaluation of cash position of a firm
Answer is Right!
Answer is Wrong!
The correct answer is: B. Projecting the profits of the business in the long run
A cash flow statement is a financial statement that shows how much cash a company has coming in and going out over a period of time. It is not a profit and loss statement, which shows how much revenue a company has earned and how much expenses it has incurred. Therefore, a cash flow statement cannot be used to project the profits of a business in the long run.
A cash flow statement can be used to:
- Evaluate the cash position of a firm.
- Determine the sources and uses of cash.
- Identify the causes of cash shortages or surpluses.
- Plan for future cash needs.
- Make investment decisions.
- Analyze the financial performance of a company.
Here is a brief explanation of each option:
- Option A: Planning the repayment of loans and replacement of fixed assets. A cash flow statement can be used to determine how much cash a company will need to repay loans and replace fixed assets. This information can be used to plan for 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z"/> Subscribe on YouTube