In the Statement of Cash Flows, More Purchases of Long-Term

question 97

True/False

In the statement of cash flows, more purchases of long-term assets than sales of long-term assets are considered a sign of a healthy company.

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Definitions:

Cash Flow

The net amount of cash and cash equivalents being transferred into and out of a business.

Creditors

Individuals or entities to whom money is owed by a debtor, usually in the form of loans or credit extended for business operations.

Millions

A numeric unit indicating one thousand thousand (1,000,000) of any quantity.

Net Working Capital

The difference between a company’s current assets and its current liabilities, indicating short-term financial health.