Financial Analysis: Buying and Selling on Credit
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Questions and Answers

What is the total operating cash flows for ABC Inc.?

  • 28 (correct)
  • 78
  • 8
  • 118
  • What is the effect of depreciation expense on property, plant, and equipment?

  • It decreases PP&E (correct)
  • It increases PP&E
  • It is not related to PP&E
  • It has no effect on PP&E
  • What is the classification of net capital expenditure in the statement of cash flows?

  • Financing activities
  • Operating activities
  • Investing activities (correct)
  • Non-cash activities
  • What is the purpose of calculating net capital expenditure?

    <p>To determine the change in property, plant, and equipment</p> Signup and view all the answers

    What is the effect of an increase in receivables on operating cash flows?

    <p>It decreases operating cash flows</p> Signup and view all the answers

    What is the classification of cash flows from increase in payables?

    <p>Operating activities</p> Signup and view all the answers

    What is the relationship between net income and operating cash flows?

    <p>Operating cash flows are always higher than net income</p> Signup and view all the answers

    What is required to calculate net capital expenditure?

    <p>PP&amp;E, depreciation expense, and net income</p> Signup and view all the answers

    What is the effect of an increase in inventory on operating cash flows?

    <p>It decreases operating cash flows</p> Signup and view all the answers

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