For Each of the Following Scenarios,determine If It Is an Indicator

question 81

Essay

For each of the following scenarios,determine if it is an indicator of potential cash flow problems:
                                                                                                                
a. Growth in accounts receivable or inventories that is less the growth rate in sales.
b. Increases in accounts payable that exceed the increase in inventories.
c. Capital expenditures that substantially exceed cash flow from operations.
d. Sales of marketable securities are less than purchases of marketable securities.
e. Other operating current liabilities that grow at a lesser rate than sales.
f. A reduction or elimination of dividend payments
g. A substantial shift from long-term borrowing to shortterm borrowing.

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Definitions:

Short-Run Equilibrium

A state in which market supply equals demand, determining the price and quantity sold, specifically within a short timeframe.

Profit-Maximizing

This refers to the process businesses use to determine the output level at which profits are at their highest.

Marginal Revenue Curve

A graph that displays how additional revenue is affected by the sale of one more unit of a product or service.

Downsloping

describes a trend or curve that goes downward, often used in economics to describe demand curves where price decreases lead to an increase in quantity demanded.