Question

lucas is worried about his companys short-term viability.
what type of financial statement should he look at?

○ cash flow statement

○ balance sheet

○ income statement

Explanation:

To determine the correct financial statement for short - term viability:

• The cash flow statement shows the inflow and outflow of cash, which is crucial for short - term operational ability. But it's not the best for short - term viability in terms of overall financial position.
• The balance sheet provides a snapshot of a company's assets, liabilities, and equity at a specific point in time. It helps assess short - term solvency (e.g., current assets vs current liabilities) which is key for short - term viability.
• The income statement shows revenues and expenses over a period, focusing more on profitability over time rather than short - term viability.

So the balance sheet is the right choice.

Answer:

B. Balance sheet