Analyzing the Statement of Cash Flows May Help Investors and Analysts

question 115

Multiple Choice

Analyzing the statement of cash flows may help investors and analysts determine the financial health of a company. Which of the following signs below is NOT an indicator of a financially healthy company?

• A)The company's operations are a major source (not a use)of cash.
• B)The company's operations result in Net cash used by operating activities.
• C)The company's investing activities include more purchases than sales of long-term assets.
• D)The company's financing activities are not dominated by borrowing.

---

Definitions:

Shifting cultivation

An agricultural practice in which plots of land are cultivated temporarily, then abandoned and allowed to revert to their natural vegetation while the cultivator moves on to another plot.

Swidden

A form of agriculture also known as slash-and-burn, where land is cleared by cutting and burning vegetation, then cultivated for several years and left fallow to regain fertility.

Bilateral Contract

A contract involving two parties where each side agrees to fulfill their side of the agreement.

Bound

Bound refers to being legally or ethically obligated; in a legal context, it often means being tied by a contract or an agreement.