Which early warning sign indicating problems with cash flows

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Problem 1: Which of the following is an early warning sign indicating problems with cash flows?

a. Cash from operating activities is higher than profit.

b. Dividends paid are greater than cash flow from operations.

c. A large amount has been spent on the acquisition of fixed assets.

d. Proceeds from financing activities are used to finance investment activities.

Problem 2: If cash received from customers is $234 000, cash paid for salaries and expenses is $130 000, depreciation of equipment is $13 000, cash received from the sale of equipment is $25 000, gain on the sale of equipment is $12 000, cash flow from operating activities is:

a. $91 000.

b. $129 000.

c. $117 000.

d. $104 000.

Reference no: EM132658493

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