Question

In the insurance industry, why is the Cash Flow Statement considered of prime importance?

a.

To evaluate the profitability of insurance products

b.

To assess the ability to generate cash for claims

c.

To analyze the investment portfolio

d.

To calculate premium collections

Posted under IC 89 Management Accounting

Answer: (b).To assess the ability to generate cash for claims Explanation:In the insurance industry, the Cash Flow Statement is crucial for assessing the ability of the firm to generate cash for fulfilling claims.

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Q. In the insurance industry, why is the Cash Flow Statement considered of prime importance?
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