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Summary QuestionWhen a company reports negative net cash flows from operations, which of the fo
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When a company reports negative net cash flows from operationsQuestionWhen a company reports negative net cash flows from operations, which of the following information is more relevant to help the firm stay proactive? C ratio of equity to annual cash expenses O ratio of equity to monthly cas...

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  • October 13, 2024
  • 3
  • 2024/2025
  • Summary

Subjects

  • but on a monthly basis
  • when a company reports negative net cash flows fro
  • which of the following information is more releva
  • understanding its liquidity and ability to cover
  • providing a more granular v

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Question


When a company reports negative net cash flows from operations, which of the

following information is more relevant to help the firm stay proactive? C ratio

of equity to annual cash expenses O ratio of equity to monthly cash expenses O

ratio of cash to monthly cash expenses ratio of accounts payable to annual

financing expenses O all of the above can be used




Answer & Explanation


When a company reports negative net cash flows from operations,

understanding its liquidity and ability to cover expenses is crucial. Let's evaluate

each option:


1. Ratio of equity to annual cash expenses: This ratio helps assess how

long the company can sustain its operations using its equity if it continues

to have negative cash flows.

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