Analyzing the Statement of Cash Flows May Help Analysts Determine

question 87

Multiple Choice

Analyzing the statement of cash flows may help analysts determine the financial health of a company. Which of the following signs below is a NOT indicator of a financially healthy company?

• A) The company's operations are a major source (not a use) of cash.
• B) The company's operations are a major use (not a source) of cash.
• C) The company's investing activities include more purchases than sales of long-term assets.
• D) The company's financing activities are not dominated by borrowing.

Understand the benefits of purchase discounts and their calculation.

Differentiate between the chart of accounts for merchandising and service businesses.

Understand the classification of different types of expenses in accounting.

Distinguish between periodic and perpetual inventory systems.