If a company is to successfully remain in business over the long haul, which of the following statements is most correct?
A) Total cash flow from operations, measured over an extended period, must be greater than zero
B) Total cash flow from investing, measured over an extended period, must be positive
C) Total cash flow from financing, measured over an extended period, should be negative
D) Total cash flow from financing plus total cash flow from investing, measured over an extended period, must be positive

Question

Quizplus · Accepted Answer

Total cash flow from operations is a good indicator of a company's ability to generate income from its regular business activities. If the cash flow from operations is consistently positive over an extended period, the company is more likely to remain in business. Cash flow from investing and financing activities may vary depending on the company's strategic goals and market conditions. Therefore, choice A is the most correct statement for ensuring long-term business sustainability.

If a Company Is to Successfully Remain in Business Over