Which financial statement is primarily used to assess cash inflows and outflows?

The Cash Flow Statement is the primary financial statement used to assess cash inflows and outflows. It provides a detailed summary of cash movements within a company over a specific period. This statement breaks down cash flows into three main categories: operating activities, investing activities, and financing activities.

By analyzing these components, stakeholders can evaluate how well a company generates cash to meet its financial obligations and fund its operations and growth. The Cash Flow Statement offers insights into the liquidity and financial flexibility of the organization, which is crucial for decision-making.

In contrast, other financial statements serve different purposes. The Balance Sheet provides a snapshot of a company's assets, liabilities, and equity at a specific point in time, but it does not directly show cash flow. The Income Statement summarizes revenues and expenses to calculate net income, reflecting profitability rather than cash movements. An Operating Statement, while similar to an Income Statement, is not specifically focused on cash flows either. Thus, the Cash Flow Statement is uniquely positioned to provide the necessary information about cash transactions, making it the best choice for assessing cash inflows and outflows.