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 positive.
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 being positive is the most important factor for a company to remain in business over the long haul as it reflects the ability of the company to generate sufficient cash flow from its core business activities to sustain and grow the business. Positive cash flow from investing and financing may also contribute to the long-term success of the company but they are not as critical as positive cash flow from operations.

If a Company Is to Successfully Remain in Business Over