Question :
21) Which of the following best indicates that a company : 1253018
21) Which of the following best indicates that a company is expanding/growing?
A) Positive cash flow from financing activities
B) Positive cash flow from investing activities
C) Negative cash flow from financing activities
D) Negative cash flow from investing activities
22) A continued trend of ________ may indicate a company is in poor financial health.
A) positive cash flow from financing activities
B) positive cash flow from operating activities
C) negative cash flow from operating activities
D) negative cash flow from investing activities
23) Which of the following supplementary disclosures are required by GAAP to be reported on the statement of cash flows or as a note to the financial statements?
A) interest and taxes paid
B) free cash flow
C) earnings per share
D) operating activities plus dividends plus capital expenditures
24) The following information is available for two different retailers, both of whom began business this year:
Cash flows from: (in 000’s)
Gnu Co.
Lube Co.
Operating Activities
$ (50,000)
$ 60,000
Investing Activities
30,000
(90,000)
Financing Activities
40,000
50,000
Net increase in cash
$20,000
$20,000
Which company appears to be purchasing long-term assets?
A) Gnu Co.
B) Lube Co.
C) Both are purchasing long-term assets
D) Neither is purchasing long-term assets
25) The following information is available for two different retailers, both of whom began business this year:
Cash flows from: (in 000’s)
Gnu Co.
Lube Co.
Operating Activities
$ (50,000)
$ 60,000
Investing Activities
30,000
(90,000)
Financing Activities
40,000
50,000
Net increase in cash
$20,000
$20,000
Which company would you expect to have future financial troubles?
A) Gnu Co.
B) Lube Co.
C) Both Gnu Co. and Lube Co.
D) Neither Gnu Co. nor Lube Co.
26) The following information is available for two different retailers, both of whom began business this year:
Cash flows from: (in 000’s)
Gnu Co.
Lube Co.
Operating Activities
$ (50,000)
$ 60,000
Investing Activities
30,000
(90,000)
Financing Activities
40,000
50,000
Net increase in cash
$20,000
$20,000
Which company would you expect to have high depreciation and/or amortization expense?
A) Gnu Co.
B) Lube Co.
C) Both Gnu Co. and Lube Co.
D) Neither Gnu Co. nor Lube Co.
27) The following information is available for two different retailers, both of whom began business this year:
Cash flows from: (in 000’s)
Gnu Co.
Lube Co.
Operating Activities
$ (30,000)
$ 60,000
Investing Activities
40,000
(90,000)
Financing Activities
10,000
50,000
Net increase in cash
$20,000
$20,000
Which company would you expect to have high interest expense?
A) Gnu Co.
B) Lube Co.
C) Both Gnu Co. and Lube Co.
D) Neither Gnu Co. nor Lube Co.
28) Free cash flow is cash from operating activities minus dividends and minus capital expenditures.
29) Free cash flow measures a company’s ability to engage in long-term investment opportunities.
30) A positive cash flow from investing activities indicates the company is expanding.
31) A negative cash flow from operating activities indicates the company is expanding.
32) A positive cash flow from operating activities indicates the company is healthy.
33) Negative cash flow from operating activities is usually good.
34) A company that has a negative cash flow from operating activities and a positive cash flow from investing activities may be in poor financial health and having to sell its long-term assets to pays its current liabilities.
35) A company that has a positive cash flow from operating activities and a negative cash flow from investing activities may be in poor financial health and having to sell its long-term assets to pays its current liabilities.
