Operating Cash Flows Affect

question 111

Multiple Choice

Operating Cash Flows affect:

• A)current assets and current liabilities.
• B)long-term asset accounts.
• C)equity accounts.
• D)long-term liability accounts.

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Definitions:

Margin of Safety

The difference between actual or expected sales and the break-even sales, measured to assess the risk of incurring losses.

Contribution Margin

The amount by which sales revenue exceeds variable costs, indicating how much contributes to covering fixed costs and generating profit.

Capital Intensive

Describes industries or businesses that require large amounts of investment in heavy machinery, equipment, or other capital assets to produce goods or services.

Margin of Safety

The difference between actual or projected sales and the break-even point, indicating the level of risk in meeting profitability targets.