Positive signs of a successful company as seen on the statement of cash flows do NOT include:
A)capital 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 is not a positive sign of a successful company as it may indicate a need for liquidity or downsizing. A successful company should be able to invest in capital expenditures (such as property, plant, and equipment) to further grow the business. The fact that operating activities are the largest source of cash is a positive sign, as it indicates that the business is generating sufficient cash flow to support its operations. Additionally, if banks are willing to lend money to the company, it can be an indicator of the company's creditworthiness and strength.

Positive Signs of a Successful Company as Seen on the Statement