n NISM Certifications
XV NISM Series XV
Medium

What is the primary purpose of a company’s cash flow statement?

Practice question from NISM XV Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Show profitability

  2. B

    Show changes in financial position

  3. Track sources and uses of cash

    Correct answer

  4. D

    Calculate net worth

Why this is the answer

The cash flow statement provides detailed information about cash inflows and outflows from operating, investing, and financing activities, helping assess liquidity. Profitability and net worth are covered by the income statement and balance sheet, respectively.

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