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zloy xaker [14]
3 years ago
8

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?
a. It reflects cash generated and used during the reporting period.
b. 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.
Globo-Chem Co. reported net sales of $200 million last year and generated a net income of $44 million. Last year's accounts receivable increased by $20 million. What is the maximum amount of cash that Globo-Chem Co. received from sales last year?
a. $135 million
b. $64 million
c. $90 million
d. $180 million
Business
1 answer:
Rufina [12.5K]3 years ago
7 0

Answer:

Which of the following is true for the statement of cash flows?

  • a. It reflects cash generated and used during the reporting period.

Revenues are recognized when the earning process is completed, and they are not necessarily associated to the collection of cash, e.g. accounts receivable.

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.

What statements? I looked for a similar question:

  • Ruth Enterprises distributes a holiday bonus to all its employees ⇒ OPERATING ACTIVITY
  • Yum Co. uses cash to repurchase 10% of its common stock. ⇒ FINANCING ACTIVITY
  • A company buys some common stock in its supplier's firm with its extra cash. ⇒ INVESTING ACTIVITY
  • A company records a decrease in its total raw materials inventory from the previous year. ⇒ OPERATING ACTIVITY

Globo-Chem Co. reported net sales of $200 million last year and generated a net income of $44 million. Last year's accounts receivable increased by $20 million. What is the maximum amount of cash that Globo-Chem Co. received from sales last year?

  • d. $180 million

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