a. 16. Cash flow from operating activities is increased by: an increase in accounts receivable b. an increase in inventory a decrease in accounts payable d. depreciation c. are organized in order of colo Assets on the a. statement of cash flows, leverage b. balance sheet, liquidity income statement, liquidity d. income statement, profitability balance sheet, profitability e. 12. Suppose two firms differ only in their use of debt; they have identical assets, sales, operating costs, interest rates on their debt, and tax rates. But one firm has a higher debt ratio. The firm that uses more debt will have a lower profit margin on sales and a lower return on assets. a. True b. False a