Which activity on the cash flow statement describes how well a company can supply itself funds...

Which activity on the cash flow statement describes how well a company can supply itself funds from what the company is in business to sell:

a) Operating Activity

b) Financing Activity

c) Investing Activity

d) All of the activities on the cash flow statement.

Solutions

Expert Solution

Cash flow from operating activities provides information to the company regarding the cash inflows and the cash outflows from the operating activities of the company by selling the product. Also this category of cash flow consists of increase or decrease in account receivable which gives a clear picture in collection of funds from the debtors. Moreover operating activities starting point is of net income which is calculated by considering the sales and purchases made by the company.

Cash flow from investing activities gives information regarding any sale or purchase of investment made by the company in fixed asset or long term assets. Cash flow from financing activities provides information regarding finance is made by the company from the outsiders or any other payment made to the outsiders on any finance earlier borrowed.

Therefore cash flow from operating activities describes how well a company can supply itself fund from what the company is in business for sale.

So the correct option is A

If you find the answer helpful please upvote.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

1. Which of the following statements best describes the purpose of the cash flow statement? A....

1. Which of the following statements best describes the purpose of the cash flow statement? A. To explain the sources and uses of cash during the accounting period B. To determine the company’s profitability during the fiscal year C. To determine the level of debt the company must finance D. Assess the competitive risks faced by the company. 2. Which of the following statements best describes the purpose of internal controls over financial reporting? A. To reduce the likelihood that...

explain in 300 word's what is a cash flow statement and a funds flow statement?

Which funds uses a statement of cash flow examples of activities that use internal service...

*Which funds uses a statement of cash flow * examples of activities that use internal service funds vs enterprise funds

the cash flow cycle______. a. describes the flow of cash through a company. b. illustrates that...

the cash flow cycle______. a. describes the flow of cash through a company. b. illustrates that profits and cash flows are the same. c. reminds a financial manager that profits are important. d. focuses on financing activities only.

You can determine a company's cash situation by analyzing the cash flow statement. The cash flow ...

You can determine a company's cash situation by analyzing the cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets. A firm has $100 million in revenues. Does that mean it has generated a cash flow of $100 million? No Yes Three categories of activities (operating, investing, and financing) generate or...

Explain how the cash flow statement and the income statement are similar and, in turn, how...

Explain how the cash flow statement and the income statement are similar and, in turn, how they are different. (You may want to form two columns.) Discuss the important differences between sensitivity analysis and scenario analysis in the risk analysis of capital budgeting and, maybe more importantly, why these tools are used by analysts. What, if anything, does Monte Carlo simulation add to the discussion of project risk?

Explain how the cash flow statement and the income statement are similar and, in turn, how...

1. Which of the following best describes a success scenario? - A statement that describes how...

1. Which of the following best describes a success scenario? - A statement that describes how certain decisions lead to success -A statement that defines what it means for the system to perform as intended -A statement of what could go wrong within a system -A statement of who, what, when, where and how a system would fail 2. Which of the following variable types represent measurable properties of a system itself? -Input Variables -Output Variables -Exogenous Variables -State Variables...

The cash flow statement below is extracted from a company. Cash Flow Statement 12/25/2020 (Dh ’000)...

The cash flow statement below is extracted from a company. Cash Flow Statement 12/25/2020 (Dh ’000) 12/27/2019 (Dh ’000) 12/28/2018 (Dh ’000) Cash from operations Net income 8,706 7,025 18,434 Depreciation & amortization 18,663 16,131 12,672 Net increase (decrease) in assets & liabilities 6,696 26,659 10,623 Other adjustments, net 1,396 924 3,996 Net cash provided by (used in) operations 35,461 50,739 45,725 Cash from investments (Increase) decrease in property & plant -28,784 -34,265 -34,734 Other cash inflow (outflow) -35,434 -1,143...

You can determine a company's cash situation by analyzing the cash flow statement

5. Cash flows "Cash Is King" for all businesses You can determine a company's cash situation by analyzing the cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets. Which of the following is true for the statement of cash flows? It reflects revenues when earned It reflects cash generated and used...

Subjects