Ask Question
BusinessBusiness
19 March, 22:38

When looking at the financial statements, you notice that a company has cash flows from operating and investing activities that are significantly lower than their cash flows from financing activities. What can you assume about the company

+4
Answers (1)
  1. 19 March, 23:17
    0
    Assumption is that this is a healthy company

    Explanation:

    A higher proportion of cash flow from financing activities implies that there is availability of funds in the company. It means that there is more money entering the company than is going out, which implies a rise in the company's assets.

    A second indication of more money from financing activities is that the company possesses the ability to maintain and/or grow its operations. With such money it can buy equipment to boost its production and its revenue as a result, it can pay off loans where necessary or invest the money in short term deposits to generate interest income in addition to its trading profit.

    Lastly, it indicates it can pay fund providers dividends and/or interest on loans depending on its capital structure.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “When looking at the financial statements, you notice that a company has cash flows from operating and investing activities that are ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
What does division mean on a job application?
Answers (1)
lassify the following (quantitative) random variables according to whether they are discrete or continuous. 1. The number of violent crimes committed per month in your community. 2. The amount of flu vaccine in a syringe. 3.
Answers (1)
Chris Baker's adjusted gross income on her 2017 tax return was $160,000, which covered a 12-month period.
Answers (1)
Journalize the following five transactions for Nexium & Associates, Inc. Omit explanations. March 1 - Bills are sent to clients for services provided in February in the amount of $800. March 9 - Corner Office, Inc.
Answers (2)
Which of the following will always be true when an economy is in long-run equilibrium?
Answers (1)
New Questions in Business
A (n) is the issuer's written promise to pay an amount equaling the par value. The par value is paid at a specified future date. Most often, the issuer is required to make semiannual interest payments.
Answers (1)
The primary goal of the Consumer Financial Protection Bureau is: A To monitor your credit report and ensure your identity and other sensitive data has not been compromised. B To protect against abusive or deceptive debt collection purposes.
Answers (1)
Jake Skinner purchases a big screen TV on credit and will repay the loan with one payment at the end of 90 days. What type of credit did Jake use?
Answers (1)
Which most likely results from producers engaging in specialization? Producers reduce their costs. Producers increase their market share. Producers decrease the materials needed for production. Producers always offer more competitive pricing.
Answers (1)
The workers at State Hospital, a public sector employer, and Acme Inc, a private employer, are subject to speech censorship and arbitrary job termination. Constitutional issues are present only for the State Hospital workers. TrueFalse
Answers (1)
Home » Business » When looking at the financial statements, you notice that a company has cash flows from operating and investing activities that are significantly lower than their cash flows from financing activities. What can you assume about the company
Sign Up Forgot Password?