Analyzing the statement of cash flows may help analysts determine the financial health of a company.Which of the following signs below is NOT an indicator of a financially healthy company?
A)The company's operations are a major source (not a use)of cash.
B)The company's operations result in Net Cash Used by Operating Activities.
C)The company's investing activities include more purchases than sales of long-term assets.
D)The company's financing activities are not dominated by borrowing.

Question

Quizplus · Accepted Answer

Net Cash Used by Operating Activities indicates that the company is using cash to finance its operations rather than generating cash from them. This is not an indicator of a financially healthy company.

Analyzing the Statement of Cash Flows May Help Analysts Determine