A company's net cash from operating activities is lower than its net income indicating that
A) too little cash is being spent.
B) the company had less available funds than its net income.
C) too much cash is being spent.
D) none of the above.

Question

Quizplus · Accepted Answer

When a company's net cash from operating activities is lower than its net income, it indicates that the company had less cash generated from its core business operations than the profit reported on the income statement. This can happen for various reasons, such as an increase in accounts receivable or inventory, which are earnings not yet received in cash.

A Company's Net Cash from Operating Activities Is Lower Than