A "Cash Hog" Type of Business

question 92

Multiple Choice

A "cash hog" type of business

• A) is one that is losing money and requires cash infusions from its corporate parent to continue operations.
• B) is one that generates cash flows that are too small to fully fund its operations and growth.
• C) generates negative cash flows from internal operations and thus requires cash infusions from its corporate parent to report a profit.
• D) is a business growing so rapidly that it does not have the funds to cover its short- and long-term debt obligations.
• E) is one that has more current liabilities than current assets and faces a liquidity crisis due to declining sales revenues and declining profitability.