S12-1 (Learning Objective 1: Explain the purposes of the statement of cash flows) State how the statement of cash flows helps investors and creditors perform each of the following functions: a. Predict future cash flows Solution answer.. purpose od cash flow statments...The purpose of the cash flow statement or statement of cash flows is to provide information about a company\'s gross receipts and gross payments for a specified period of time. The gross receipts and gross payments will be reported in the cash flow statement according to one of the following classifications: operating activities, investing activities, and financing activities. The net change from these three classifications should equal the change in a company\'s cash and cash equivalents during the reporting period. For instance, the cash flow statement for the calendar year 2013 will report the causes of the change in a company\'s cash and cash equivalents between its balance sheets of December 31, 2012 and December 31, 2013. The statement of cash flow\'s primary purpose is to provide information regarding a company\'s cash receipts and cash payments. The statement complements the income statement and balance sheet. When credit decisions are made, many factors must be assessed. The income statement and balance sheet provide information about some of these factors, the cash flow statement provides information about the other factors. and through these data invester can anlysis the company position .......... Over the life of a company, total net income and net cash inflow will equal. However, since income determination is based on accrual accounting, income and cash flow will rarely equal in an annual accounting period. .