Which of the three types of activities reported on the statement of cash flows is the MOST critical for a company's long-term survival?
A)investing activities
B)operating activities
C)financing activities
D)noncash investing and financing activities

Question

Quizplus · Accepted Answer

Operating activities are the most critical for a company's long-term survival because they reflect the company's ability to generate cash from its primary business operations. Without positive operating cash flow, a company may not be able to fund its day to day operations, invest in growth opportunities, or pay off debts, which can ultimately result in insolvency. Investing activities and financing activities can also impact a company's long-term survival, but they are typically more focused on longer-term strategic decisions, such as investing in capital assets or raising capital from investors, which may not be directly related to a company's ongoing ability to generate positive operating cash flow.

Which of the Three Types of Activities Reported on the Statement