Two Advantages of Financing with Current Liabilities Are Flexibility and Lower

question 134

True/False

Two advantages of financing with current liabilities are flexibility and lower interest cost.

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Definitions:

Total Assets Ratio

A financial metric used to evaluate a company's financial health by comparing its total assets to its total liabilities.

Operating Cash Flows

Cash generated or used through a company's main business operations.

Noncash Investing

Transactions that involve the acquisition or disposal of long-term assets without the immediate use of cash, often reflected in the investing activities section of the cash flow statement.

Financing Activities

Actions and decisions related to managing the company's funding structure, including securing loans, issuing stock, and making dividend payments to shareholders.