It Is Important to Remember When Assessing the Financial Soundness

question 78

Multiple Choice

It is important to remember when assessing the financial soundness of a company that:

• A)if profits are adequate,there will be sufficient funds to pay salaries and fund cash flow.
• B)cash flow is the key financial element in determining financial soundness.
• C)revenues need to equal to twice the debt load in order for the company to be viable.
• D)the buyer is buying the past revenues and profits of the company.

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