Question: 1 . In a cash flow statement, how would you interpret the following? 1 . 1 . A positive cash flow from operating activities? 1
In a cash flow statement, how would you interpret the following?
A positive cash flow from operating activities?
A negative cash flow from operating activities?
Users of financial statements usually compare the cash used for investing activities with the cash provided by operating activities? Explain why.
Answer the following questions based on information gleaned from a cash flow statement of a company.
Cash flows from operating activities are decreasing even though profits are increasing. How would you explain this? What are possible consequences?
Of what significance are the details of an entitys investing activities to an investor?
How would you interpret a combination of positive net cash flows from operating activities and negative cash flows for investing activities?
A company generates more cash from operating activities than it can use for investing activities. What would the company probably do with the cash?
What does this say about the performance and prospects of the company?
Cash inflow from financing activities may be a positive sign or a negative sign depending on how the funds were utilised. Discuss this statement.
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