What is the primary role of a cash flow statement?

The primary role of a cash flow statement is to describe the availability of funds. This financial document provides a detailed analysis of the inflows and outflows of cash within an organization over a specific period. By presenting how cash moves in and out, the cash flow statement enables stakeholders to assess the business's liquidity, operational efficiency, and overall financial health. It helps investors, creditors, and management understand how cash is generated from operations, how it is used for investing activities, and how financing activities impact cash reserves. This visibility into cash availability is crucial for planning, decision-making, and ensuring that the organization can meet its short-term obligations.

Other options, while relevant to financial management, do not reflect the primary purpose of a cash flow statement. For instance, tracking financial debts pertains to liabilities management, evaluating investment returns focuses on the profitability of investments, and summarizing revenue generated primarily aligns with income statements rather than cash flow.