Because Firms Are Unable to Match Cash Inflows to Outflows

question 134

True/False

Because firms are unable to match cash inflows to outflows with certainty, most of them need current liabilities that more than cover outflows for current assets.

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Definitions:

Total Stockholders' Equity

The total value of a company owned by its shareholders, calculated as the sum of share capital and retained earnings minus treasury shares.

Mars Corporation

An international manufacturer known for its confectionery products, pet food, and other food products and services.

Dividend Yield Ratio

A financial metric indicating the amount of dividend expressed as a percentage of a current share price.

Common Stock

A type of equity security that represents ownership in a corporation, giving shareholders voting rights and a share in the company’s profits through dividends.