Which of the following is the best definition of cash flow time line?
A) The time between cash disbursement and cash collection.
B) Graphical representation of the operating cycle and the cash cycle.
C) A promise by the firm, included in the debt contract, to perform certain acts. A restrictive covenant imposes constraints on the firm to protect the interests of the debtholder.
D) A secured short-term loan to purchase inventory.
E) The time it takes to acquire and sell inventory.

Question

Quizplus · Accepted Answer

A cash flow timeline is a graphical representation that shows the inflows and outflows of cash over a specific period. It is used to visualize the timing of cash movements in and out of a business, project, or investment, which helps in understanding and managing liquidity. Options A, C, D, and E describe other financial concepts that are not related to the graphical representation of cash flows.

Which of the Following Is the Best Definition of Cash