Last year, Blanda Brothers had positive net cash flow, yet cash on the balance sheet decreased. Which of the following could explain the company's financial performance?
A) The company issued new common stock.
B) The company issued new long-term debt.
C) The company sold off some of its assets.
D) The company purchased a lot of new fixed assets.
E) The company eliminated its dividend.

Question

Quizplus · Accepted Answer

Purchasing a lot of new fixed assets would explain the positive net cash flow, but the decrease in cash on the balance sheet suggests that the company used that cash to make the new fixed asset purchases.

Last Year, Blanda Brothers Had Positive Net Cash Flow, Yet