A Company Reports the Following Information from the Statement of Cash

question 116

Multiple Choice

A company reports the following information from the statement of cash flows: Which line item provides a signal that the company may have cash flow problems?

• A)net cash provided by operating activities
• B)net income
• C)net cash used by investing activities
• D)net cash used by financing activities

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Definitions:

Liability

Any form of financial debt or obligation that an individual or company owes, which is recorded on the balance sheet.

Dividend Growth Model

A valuation method that forecasts the price of a stock by using predicted dividends and discounting them back to present value.

Stock

Portions of equity in a company that signify an ownership interest and a right to its assets and profits.

Present Value

The monetary worth at present of a future sequence of payments or a single amount, calculated with a specific interest rate.