All of the following are advantages of an increasing cash flow from operations except:
A) A company is likely to pay its current bills with cash from operations not earnings.
B) A company with cash is in a better position to fund growth.
C) Large cash flows eliminate the need for borrowing.
D) Earnings are viewed better if cash flows from operations closely match profit for the year.

Question

Quizplus · Accepted Answer

While large cash flows can certainly reduce the need for borrowing, eliminating the need for borrowing would depend on the specific circumstances of the company and its growth plans. Additionally, there may be advantages to strategically using debt financing even if cash flows are strong.

All of the Following Are Advantages of an Increasing Cash