State the objectives of cash flow statement.
The primary objective of a Cash Flow Statement is to provide useful information about cash flows (inflows and outflows) of an enterprise during a particular period under various heads, i.e., operating, investing, and financing activities.
It enables users to evaluate changes in net assets and the financial structure of an enterprise, including its liquidity and solvency. It also assists in assessing the ability of the enterprise to generate cash and cash equivalents and ascertaining the amount and certainty of future cash flows.
Furthermore, the statement enhances the comparability of the reporting of operating performance by different enterprises because it eliminates the effects of using different accounting treatments for the same transactions and events.
Explanation
The answer is derived directly from Section 6.1 'Objectives of Cash Flow Statement' and the introductory paragraphs of the provided textbook context. It covers the primary objective of providing information on cash flows under specific heads, the analytical utility regarding liquidity, solvency, and net assets, and the specific benefit regarding comparability mentioned in the text.