Grace Has Just Reviewed a Number of Indicators of Financial

question 85

Multiple Choice

Grace has just reviewed a number of indicators of financial control for her firm. One that worries her indicates that the company may soon have trouble making loan payments and clearing its current accounts receivables. In this case, Grace is concerned about the _____ ratio.

• A)profit and loss
• B)profitability
• C)leverage
• D)net working capital
• E)return on investment

Analyze the effects of dividends on cash flow.

Identify the effects of capital expenditures on cash flow.

Evaluate the financial health of a corporation through its cash flow activities.

Understand how to analyze and prepare the statement of cash flows.

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Definitions:

Activity Variance

The difference between the budgeted amount for an activity and the actual amount spent.

Budgeting

The process of creating a plan to spend your money, outlining how much revenue a company anticipates receiving and how much it expects to spend over a specific period.

Actual Results

The real, achieved outcomes of activities, such as financial performance, compared against planned or projected outcomes.

Customers Served

The number of individual clients or customers that a business or service has provided for over a certain period of time.