Practice question
Consider the following statements regarding Funds Flow Analysis in financial management: Statement 1: The Funds Flow Statement is a narrow concept that focuses exclusively on actual cash receipts and cash payments. Statement 2: The Funds Flow Statement captures changes in Net Working Capital and includes non-cash working capital elements. Choose the correct option:
- 1Both statements are true.
- 2Both statements are false.
- 3Statement 1 is false, but Statement 2 is true.✓
- 4Statement 1 is true, but Statement 2 is false.
Correct answer
Statement 1 is false, but Statement 2 is true.
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