What is reflected in a cash flow statement?

The cash flow statement is specifically designed to provide insight into a company's liquidity by detailing the cash inflows and outflows over a specific period. This statement allows stakeholders to see how money is generated and used within the business, making it a crucial tool for assessing financial health.

By breaking down cash movements into operational, investing, and financing activities, it helps in understanding how the company manages its cash—showing where cash comes from (inflows) and how it is spent (outflows). This is essential for parties interested in the ability of the business to maintain and grow its operations.

The other choices relate to aspects of financial performance or position but do not pertain specifically to cash flow. For instance, net income comes from the income statement and reflects profitability rather than cash movements. Accounts receivable is concerned with sales that have yet to be collected, while inventory costs speak to the cost of goods held rather than cash itself. Therefore, option B correctly emphasizes the essence of the cash flow statement, uniquely focusing on cash activities rather than accounting measures of profitability or asset management.