Which Statement Concerning the Cash Flow Adequacy Ratio Is Incorrect

question 3

Multiple Choice

Which statement concerning the cash flow adequacy ratio is incorrect?

• A) A ratio of 100% or more over several years indicates an inadequate ability to generate sufficient operating cash to cover requirements.
• B) The ratio assesses the entity's ability to generate sufficient operating cash flow to cover its main cash requirements.
• C) The main requirements for cash from operations is to pay debts, acquire assets and pay dividends.
• D) A fall in the ratio indicates a lower ability to generate operating cash to meet requirements.

---

Definitions:

18th-Century Painting

Refers to the art of painting during the 1700s, characterized by various styles such as Rococo, Neoclassicism, and the beginnings of Romanticism.

Roman Emblem

A symbol or motif used in ancient Rome to represent a family, legion, or institution, often depicted on shields, coins, and architectural elements.

Houdon

Jean-Antoine Houdon, an 18th-century French sculptor renowned for his portrait busts and statues of philosophers, inventors, and political figures of the Enlightenment.

George Washington

The first President of the United States, a Founding Father, and a leader of the American Revolutionary War.