Why can it be misleading to use a firm's working capital to discuss cash flow without further qualification

Q: Evaluate the effect of gearing on cost of capital and firm value taking into consideration the…

A: The term “gearing” can be defined as the tool to gauge company’s financial leverage by emphasizing…

Q: Explain "free cash flows." Why do managers like to retain free cash flows instead of distributing it…

A: Free cash flows (FCF) equals the amount left with the company after the required payments to the…

Q: The following are goals‘and objectives in working-capital management. Which is the LEAST ACCURATE?…

A: Working capital is the capital required for the day-to-day operation of the business. If this amount…

Q: What does a negative value for unlevered free cash flow imply for the claimants of a firm

A: Unlevered free cash flow for a company is that free cash flow which is determined and computed…

Q: Beyond profitability, what indicators are important to investors and creditors?

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Trur or False? The Cash flow received from the firm's assets  must equal the cash flows to the…

A: Answer: The answer is TRUE; cash flow from assets is equals to cash flow to stockholders plus cash…

Q: What information can a statement of cash flows provide about a company’s financingactivities that…

A: Cash flow statement: A type of financial statement which shows the cash position of a business by…

Q: 1. Explain how capital reduces banking risks. Discuss the importance of cash flows and economic…

A: Capital reduces banking risks:  It reduces banking risk by protecting against insolvency. It is used…

Q: Why might the riskiness of cash flow from the residual value of the real estate differ from the…

A: It is nothing but the salvage value or scrap value of an asset. It speaks to the measure of…

Q: Would it ever be rational for a firm to borrow money in order to pay cash dividends? Explain.

A: The dividends can be paid by company on following  these rules: 1. Out of profits of the company…

Q: Answer the following questions for the directors: True or false, does the statement of cash…

A: Cash flow statement determines the total cash inflows and outflows occurred to a business during a…

Q: Which of the following statements is not correct   O a. Cash balance does not have an opportunity…

A: 1.A firm may hold surplus cash balance to pay dividend to its shareholders. It is correct…

Q: nalysts pay so much attention to the Statements of Cash Flows versus the Income Statement?

A: Income statement shows the profit and loss over the period after deductions of expenses from the…

Q: What rate do investors use to discount the capital gains and cash flows of firms?

A: Discounted cash flow estimates the present value of an asset by using projected cash flows.…

Q: Is it possible for a company to show positive cash flows and still be in grave trouble?

A: Positive Cashflows indicates that the company has increased its cash balance from its previous year.…

Q: In the long run, is it more important for a business to havepositive cash flows from its operating…

A: Statement of cash flows: This statement reports all the cash transactions which are responsible for…

Q: Cash Flow and Early Exits Why can it be misleading to use a firm's working capital to discuss cash…

A: Firm’s working capital can be determined by calculating the difference between the current assets…

Q: Which of the following statements is false? A) The main components of net working capital are…

A: Working Capital = Current Assets- Current Liabilities

Q: - How would a reduction in the cash conversion cycle increase profitability? What are some actions a…

A: CCC or cash conversion cycle is referred to as the metric, which is used to express the time length…

Q: What is float? How do firms use float to increase cash managementefficiency?

A: Financially, the float consists of cash that is shortly measured twice as long as a deposit is…

Q: What are the advantages/disadvantages of using the discounted cash flows method of estimating the…

A: Discounted cash flows method : Discounted cash flow method considers the time value of money in…

Q: Explain "frce cash flows. Why do managers like to retain free cash flows instead of distributing it…

A: Free cash flows : As the name suggests, free cash flows relates to the fund that are leftover to a…

Q: Which

A:

Q: the firm has generated excess cash from operations, how did the firm invest the excess cash? If not,…

A: Cash flow statement The cash flow statement is one of the components of the financial statement.…

Q: Which of the following statement on the firm's net working capital is incorrect? A. Holding other…

A: Formula for net working capital is current assets - Current liabilities.

Q: Suppose you are the only owner of a chain of coffee shops near universities. Your current cafés are…

A: Free Cash Flow=Net Income + Non Cash Expenses - Increase in working capital - Capital Expenditure…

Q: What information can a statement of cash flows provide about a company’s investing activities that…

A: Cash flow statement: A type of financial statement which shows the cash position of a business by…

Q: TRUE OR FALSE   The balance sheet indicates the critical nature of the cash flow to the operation…

A: STATEMENT OF CASH FLOW INDICATES THE CRITICAL NATURE OF CASH FLOW TO THE OPERATION OF THE FIRM .

Q: a. Discuss the factors that are likely to influence the desired level of cash of a company

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following statements is NOT CORRECT? The corporate valuation model can be used both for…

A: Corporate valuation is a systematic process to find the true value based on financial data.  Most of…

Q: Practice : a: The computation of return on average investment ignores one characteristic of the…

A: Capital budgeting refers to the technique of evaluating a project for investing in it. It has…

Q: Did the cash flow from operations cover the dividend payment made by the firm (if any)?

A: Hello, since your question has multiple parts we will solve the first question for you. If you want…

Q: Is it realistic to believe that an optimal capital structure exists or might be achieved by a…

A: An optimal capital structure refers to the best mix of debt and equity used by a Company to finance…

Q: Explain the theory behind the free cash flow valuation approach. Why are the free cash flows value…

A: The free cash flows valuation approach will be a theory for determining a company's intrinsic value,…

Q: Name some factors that are generally beyond the firm’s control butstill affect its cost of capital

A: The cost of capital is the cost of source of funds that are used to buy the assets.

Q: Did the cash flow from operations cover the dividend payment made by the firm (if any)? b) If the…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: What is the relationship between the predictability fo a firm's cash inflows and its required level…

A: Working capital, otherwise called net working capital (NWC), is the distinction between an…

Q: How do we determine a firm’s cash flows?

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: How can the company, which is a profitable one, have insufficient cash flows? Explain your answer.

A: Quickclick Media Ltd. announces that their profits in the current year have increased over the…

Q: Can a firm have income without also having a positive cash flow? Explain.

A: Cash Flows are the inflows & outflows of cash in the business to meet the day to day activities.…

Q: Discuss the strength and weaknesses of cash-flow based valuation models. How do variations in the…

A: Cash flow based valuation models  Strengths : DCF depends, unlike most valuation models, on inflows…