The extent to which a firm adjusts net income for changes in noncurrent assets and noncurrent liabilities in deriving cash flow from operations depends on the nature of its operations. Some firms use _____ to finance the working capital needs.
A)suppliers
B)equity financing
C)short-term borrowing
D)long-term borrowing
E)all of the above

Question

Quizplus · Accepted Answer

The extent to which a firm adjusts net income for changes in noncurrent assets and noncurrent liabilities in deriving cash flow from operations can indeed depend on the nature of its operations. Firms can use a variety of sources to finance their working capital needs, including suppliers (through trade credit), equity financing, short-term borrowing (like lines of credit), and long-term borrowing (such as long-term loans). Each of these options can be suitable depending on the firm's financial strategy, operational needs, and market conditions.

The Extent to Which a Firm Adjusts Net Income for Changes