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What is ONE use of a cash flow statement for management? (A) To negotiate finance (B) To identify new markets (C) To determine the value of intangibles (D) To calculate depreciation of non-current assets - HSC - SSCE Business Studies - Question 6 - 2008 - Paper 1
Question 6
What is ONE use of a cash flow statement for management? (A) To negotiate finance (B) To identify new markets (C) To determine the value of intangibles (D) To calcu... show full transcript
Worked Solution & Example Answer:What is ONE use of a cash flow statement for management? (A) To negotiate finance (B) To identify new markets (C) To determine the value of intangibles (D) To calculate depreciation of non-current assets - HSC - SSCE Business Studies - Question 6 - 2008 - Paper 1
Step 1
To negotiate finance
Answer
A cash flow statement is crucial for management as it provides detailed insights into cash inflows and outflows over a specific period. This information is essential when negotiating finance, as it helps management to demonstrate the company's liquidity and financial health to potential lenders or investors. It shows whether the business has sufficient cash to meet its obligations and further invest in opportunities.