While Analyzing Tektron's Statement of Cash Flows, You Note That

question 20

Multiple Choice

While analyzing Tektron's statement of cash flows, you note that there was a net cash outflow from investing activities of $87,000, while cash provided by operations was$95,000. This means that:

• A) Tektron only had a net increase in cash of $7,000.
• B) Tektron is spending too much on investing activities.
• C) The next step in the analysis is to examine the schedule of noncash financing and investing activities.
• D) The next step in the analysis is to examine the financing section and the schedule of noncash financing and investing activities.
• E) The next step in the analysis is to examine the financing activities section.

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Definitions:

Returns

The gains or losses made from an investment over a particular period, often expressed as a percentage of the investment's initial cost.

Interest Rate

The percentage of an amount of money charged by lenders to borrowers for the use of money, usually expressed as an annual percentage.

Bonds

Fixed-income securities issued by corporations, municipalities, or governments to finance projects or operations, representing a loan made by an investor to the issuer.

Lenders

Individuals or institutions that provide funds to borrowers under the expectation of being repaid with interest.