Last Year, Tucker Technologies Had (1) a Negative Net Cash

question 28

Multiple Choice

Last year, Tucker Technologies had (1) a negative net cash flow from operations, (2) a negative free cash flow, and (3) an increase in cash as reported on its balance sheet. Which of the following factors could explain this situation?

• A) The company had a sharp increase in its inventories.
• B) The company had a sharp increase in its accrued liabilities.
• C) The company sold a new issue of common stock.
• D) The company made a large capital investment early in the year.

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Definitions:

Earnings Per Share

A financial ratio that divides a company's net earnings available to common shareholders by the number of outstanding shares, indicating the profitability on a per-share basis.

Debt

Money owed by one party to another under the condition that it is to be repaid, often with interest, at a later date.

Capital Structure

The mix of different forms of external funds used to finance a company's operations, such as debt and equity.

Earnings Per Share

A financial ratio that measures the amount of net income earned per share of stock outstanding.