Different Types of Businesses Have Different Cash Flow Cycles

question 5

Multiple Choice

Different types of businesses have different cash flow cycles. Which of the following statements describe the cash flow cycle of retailers and which describe the cash flow cycle of manufacturers?

• A) Sell finished goods on credit to customers = Manufacturers
• B) Turn raw materials into finished goods = Manufacturers
• C) Sell bought in goods to customers for cash = Retailers
• D) Goods for resale purchased on credit from suppliers = Retailers

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Definitions:

Book Value

The net value of a company's assets minus its liabilities, often used to evaluate the worth of a company.

Constant Percentage

A method or rate that remains unchanged over a specified period or under certain conditions.

Capital Expenditure

Capital allocated by a business to purchase, improve, and sustain tangible assets like real estate, factories, or machinery.

Purchase Price

The amount of money paid to buy goods or services.