Question

"Cash Is King" for all businesses You can determine a company's cash situation by analyzing the cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets. which of the following is true for the statement of cash flows? It reflects cash generated and used during the reporting period. It reflects revenues when earned. Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following table, identify which type of activity is described by each statement. Operating Activity Investing Activity Financing Activity 0 Dand w Co. sells its last season's inventory to a discount store. Digiink Printing co. buys new machinery to ramp up its production capacity. A company records a loss of $70,000 on the sale of its outdated inventory. Yum Co. uses cash to repurchase 10% of its common stock 0 0 Exeter Enterprise Inc. reported net sales of $500 million last year and generated a net income of $110 million. Last year's accounts receivable increased by $8 million. What is the maximum amount of cash that Exeter Enterprise Inc. received from sales last year? O O $246 million $492 million $369 million $118 million

Answer 1

Que 1: It reflects cash generated and used during the reporting period

Que 2:

a) Operating activity

b) Investing activity

c) Operating activity

d) Financing activity

Que 3:

=Sales-increase in AR

=500-8

=492 million