If Cash Flows Provided by Operating Activities Are a Relatively

question 6

True/False

If cash flows provided by operating activities are a relatively small amount, a company may offset this problem on a short-term basis by cutting back on capital expenditures or by borrowing funds or issuing stock.

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Definitions:

Intangible Services

Services that cannot be physically touched or stored, such as education, consulting, or legal advice.

Inventory

The quantity of goods that a company has in stock, ready for sale or distribution.

Investment Component

A part of economic activity related to spending on goods and services not for immediate consumption but for future benefit.

Government Purchases Component

The part of gross domestic product (GDP) that includes spending by all levels of government on goods and services.