Positive signs of a successful company as seen on the statement of cash flows do NOT include:
A)investments in property,plant and equipment.
B)operating activities are the largest source of cash.
C)banks are willing to lend money to the company.
D)the sale of a majority of a company's plant assets.

Question

Quizplus · Accepted Answer

The sale of a majority of a company's plant assets indicates that the company is reducing its capacity for future production and growth, which is not a positive sign for a successful company. On the other hand, investments in property, plant, and equipment indicate that the company is reinvesting in its future growth. Operating activities as the largest source of cash and banks willing to lend money to the company are positive signs of a successful company.

Positive Signs of a Successful Company as Seen on the Statement