Which of the Following Statements Concerning the Cash Adequacy Ratio

question 12

Multiple Choice

Which of the following statements concerning the cash adequacy ratio is true?

• A) It measures the entity's ability to reinvest in its operations and to make distributions to owners from its operating cash flow.
• B) It expresses the cash flow from operating activities as a percentage of capital expenditure plus dividends.
• C) A ratio result greater than one suggests a good performance.
• D) All of the statements are true.

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Definitions:

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The process by which individuals learn and internalize the values, beliefs, and norms of their culture, contributing to their personal development and social identity.

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