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| The cash flow cycle: describes the flow of cash through a company. |
| In measuring value, the firm’s focus should be on: cash flow. |
| The three basic types of cash-related activities that every business faces are:
financing, operations, and investing. |
| Borrowing monies from financial institutions to fund the firm’s revenue growth is an example of which cash-related activity in the cash flow cycle? Financing activity |
| Raising new capital through the sale of common equity is an example of which cash-related activity in the cash flow cycle? Financing activity |
| To generate cash to invest in fixed assets, a firm can issue equity or obtain a loan from a bank. This is an example of which cash-related activity in cash flow management? Financing activity |
Cash flows and profits are synonymous, in other words, higher cash flows equal higher profits
False
| The ________ measure a firm’s performance over a specified period of time whereas a ________ provides a snapshot of the firm as of a specific date. income and cash flow statements; balance sheet |