A Negative Value for the Net Liquid Balance Indicates Reduced

question 18

Multiple Choice

A negative value for the net liquid balance indicates reduced financial flexibility and

• A)an increased dependence on outside financing
• B)an increased sustainable growth rate
• C)that cash and equivalents are growing relative to the company's use of short-term financing
• D)that bank borrowing is growing relative to other arranged short-term financing

---

Definitions:

Investor

An individual or organization that commits money to investment products with the expectation of achieving a profit.

Company

An organized entity formed for the purpose of conducting business, which may involve selling goods or services.

IPO

Initial Public Offering, the process by which a private company becomes publicly traded by offering its shares to the public for the first time.

Open Market

A system or environment where goods, services, and financial instruments are traded freely between participants without significant restrictions.