Analyzing the statement of cash flows may help investors and 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

A company with net cash used by operating activities indicates it is not generating enough cash from its core business operations, which is not a sign of financial health.

Analyzing the Statement of Cash Flows May Help Investors and Analysts