Asked by arielis reyes on May 26, 2024
Verified
Changes to net working capital are categorized as:
A) cash flow from operating activities.
B) cash flow from investment activities.
C) cash flow from financing activities.
D) None of the above
Net Working Capital
The gap between a firm's present assets and its current obligations, signalling its short-term economic condition.
Operating Activities
Business actions directly related to the production, selling, and delivery of a company's goods and services, reflected in its cash flow.
Cash Flow
The movement of funds into and out of a business or project, critical for maintaining operations and investment activities.
- Discern the different factors and procedures that impact the statement of cash flows and acquire knowledge on the management of cash flows.
Verified Answer
LE
Lynette EngelbretsonMay 29, 2024
Final Answer :
A
Explanation :
Changes to net working capital, such as increases or decreases in accounts receivable or inventory, are directly related to a company's operating activities and are reflected in the cash flow statement under cash flow from operating activities.
Learning Objectives
- Discern the different factors and procedures that impact the statement of cash flows and acquire knowledge on the management of cash flows.