The Most Recent Balance Sheet and Income Statement of Oldaker

question 102

Multiple Choice

The most recent balance sheet and income statement of Oldaker Corporation appear below: The company paid a cash dividend of $42 and it did not dispose of any property, plant, and equipment. The company did not retire any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows.The net cash provided by (used in) investing activities for the year was:

• A) $(127)
• B) $(138)
• C) $138
• D) $127

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Definitions:

Liquidity

A measure of how easily assets can be converted into cash without affecting their market price.

Current Assets

Assets that a company expects to convert into cash, sell, or consume within one year or its normal operating cycle, whichever is longer.

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operating cycle, such as accounts payable, wages payable, and short-term loans.

Company's Liquidity

The ability of a company to meet its short-term debt obligations, often assessed through liquidity ratios like the current ratio and quick ratio.