alleryStart learning →Into which three groups are a firm's cash flows divided?
ACurrent, fixed and intangible activities
BSelling, general and administrative activities
CDomestic, foreign and joint venture activities
DOperating, investment and financing activities
Answer & Solution
Correct answer: D. Operating, investment and financing activities
1. Using income statement and balance sheet data, cash flows are split three ways.
2. Operating activities are those related to the production of the firm's goods or services.
3. Investment activities are those related to the purchase and sale of fixed assets.
4. Financing activities are those related to debt and equity financing.
5. Current, fixed and intangible are balance sheet asset categories, so that grouping belongs to a different statement altogether.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.6 The Statement of Cash Flows_
Keep practising Using Financial Information and Accounting
Browse all Using Financial Information and Accounting questions for US CMA Part 2, or explore more Financial Management topics.
Related questions
A bakery reports total liabilities of $70,150 and owners' equity of $78,750. What is its dCost of goods sold was $112,500, beginning inventory was $18,000 and ending inventory was How is the inventory turnover ratio calculated?What do activity ratios reflect?A bakery earned a net profit of $32,175 and has 10,000 shares of common stock outstanding.Earnings per share tells an investor what?A bakery earned a net profit of $32,175 and reports total owners' equity of $78,750. What Return on equity measures what?