Users of Financial Statements Are Interested in the Ability of a Firm

question 37

Essay

Users of financial statements are interested in the ability of a firm to generate favorable cash flows.This is one reason why the FASB has required the inclusion of a statement of cash flows in the primary financial statements of an enterprise.A cash flow of major interest to investors is the dividends an enterprise has paid in the past and will pay in the future.Investors are particularly interested in the prediction of future dividends.The prediction of the cash flows associated with dividends requires,however,that investors have information regarding other cash flows of the enterprise.
Identify cash flows of an enterprise the knowledge of which would be useful to users of the financial statement in the prediction of future dividends.

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Definitions:

Female Condom

A barrier contraceptive device that is inserted into the vagina to prevent sperm from reaching the uterus, thereby avoiding pregnancy and reducing the risk of STDs.

Spermicide

A substance that is toxic to sperm.

Cervix Protection

Methods or interventions aimed at preserving the health and integrity of the cervix to prevent infections, diseases, and cancer.

Male Condom

A contraceptive device made of latex, polyurethane, or lambskin that is placed over the penis before sexual intercourse to prevent pregnancy and reduce the risk of sexually transmitted infections.