Upon review of a statement of cash flows, the following was noted: From this information, it is likely that the company is
A)using cash from operations and selling long-term assets to pay back debt
B)using cash from operations and borrowing to purchase long-term assets.
C)using its profits to expand growth.
D)using cash from investors to provide for operations.

Question

Upon review of a statement of cash flows, the following was noted:  From this information, it is likely that the company is
A)using cash from operations and selling long-term assets to pay back debt 
B)using cash from operations and borrowing to purchase long-term assets. 
C)using its profits to expand growth. 
D)using cash from investors to provide for operations.

Quizplus · Accepted Answer

The statement shows a negative net cash flow from operating activities, indicating that the company is using cash to fund its operations. Additionally, the statement shows a positive net cash flow from the sale of long-term assets and a negative net cash flow from financing activities, indicating that the company may be selling off assets to pay back debt. This suggests that the company is likely using cash from operations and selling long-term assets to pay back debt.

Upon Review of a Statement of Cash Flows, the Following