Which of the following is a warning sign of problems in managing cash flows?
A)proceeds of borrowing that are continually greater than repayments of borrowings.
B)dividends paid to shareholders that are greater than profit.
C)cash flow from operating activities that is significantly lower than profit.
D)all of the above.

Question

Quizplus · Accepted Answer

All of the options listed indicate potential problems in managing cash flows. If the company is continually borrowing more than it can repay, it may struggle to generate enough cash flow to meet its financial obligations. Similarly, if dividends paid out to shareholders exceed the profits generated by the company, this may indicate that the company is not adequately reinvesting its earnings to generate future growth. And if the cash flow from operating activities is significantly lower than profit, this may suggest that the company is not effectively managing its working capital or is experiencing issues with timely collections from customers or payments to suppliers.

Which of the Following Is a Warning Sign of Problems