The More Predictable a Firm's Cash Inflows, the More Net

question 65

True/False

The more predictable a firm's cash inflows, the more net working capital it will need.

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Definitions:

Asset Turnover

A metric indicating how effectively a company utilizes its assets to produce sales income.

Financial Ratio

A numerical comparison derived from a company's financial statements, used to evaluate aspects of its operational efficiency, liquidity, profitability, and solvency.

Nonrecurring Items

Expenses or incomes that appear infrequently or irregularly on the financial statements, not expected to recur in the foreseeable future.

Revenue Recognition

An accounting process detailing how and when revenue is earned and reported, influencing financial statements.