Ask Question
BusinessBusiness
28 February, 17:07

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. 28 February, 21:01
    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?
Get 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 there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
What dollar denominations are given out at supermarket cash back?
Answers (1)
Martha has a small tailoring business that employs five tailors and three shop assistants. Because business is going well, Martha decides to expand. She purchases twice as much cloth, thread and buttons and borrows money to expand her store space.
Answers (1)
The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves A) assessing whether the diversification move will make the company better off because it will produce a greater
Answers (1)
Josh, an electronics retailer, noticed that the e-commerce business was booming. He started an online shopping website to take advantage of this surge in business. As a result, his business attracted more customers from all across the country.
Answers (1)
Cathy has three exams and two papers coming up, and she needs to decide how much time to spend on each project to maximize her chances of doing well on all of them. the problem-solving step primarily associated with this task is
Answers (2)
New Questions in Business
On January 1, 2020 (the date of grant), Concord Corporation issues 2,300 shares of restricted stock to its executives. The fair value of these shares is $69,000, and their par value is $11,500.
Answers (1)
Tom is managing a project team responsible for building a new office building that started this week. He notices that team members are trying out different behaviors to see what is acceptable to the project and personal relations.
Answers (1)
So is a GED the same as a highschool diploma?
Answers (2)
The following account balances were drawn from the financial statements of Grayson Company: Cash $ 5,000 Accounts payable $ 1,550 Accounts receivable $ 2,100 Common stock? Land $ 8,600 Retained earnings, Jan.
Answers (1)
Quiz 1. If you maintain a good driving record, your car insurance company may reward you with
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?