Generally, the most important category on the statement of cash flows is cash flows from: a

Finance Dec 18, 2020

Generally, the most important category on the statement of cash flows is cash flows from:

a. operating activities.

b. investing activities.

c. financing activities.

d. significant noncash activities.

Expert Solution

The correct answer to the given question is option a. operating activities.

The most important category on the statement of cash flows is usually the cash flows from operating activities because it gives an idea about the cash generated by the core operations of the firm. The other categories, namely, investing activities and financing activities give an idea about the net cash used in making investment in financial and physical assets and the net cash raised from the lenders and shareholders of the firm.

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