Question

State whether the following is True or False:

Cash Flow Statement is a tool of financial statement analysis.

Answer 1

This statement is true.

Explanation:

The Cash Flow Statement is a tool of financial statement analysis because it shows the sources and uses of cash (operating, investing and financing activities), helps assess a company’s liquidity and cash-generation ability, and is explicitly listed among the common tools/techniques used for analysing financial statements in the provided materials.