Interpret, in words, what the cash flow of the firm represents by discussing operating cash flow, changes in net working capital, and additions to fixed assets.
What will be an ideal response?
Operating cash flow is the cash flow a firm generates from its day-to-day operations. In other words, it is the cash flow generated as a result of putting the firm's assets to work. Changes in net working capital and fixed assets represent investments a firm needs for its operations. That is, a firm typically takes some of the cash flow it generates from using assets and reinvests it in new assets. Cash flow of the firm, then, is the cash flow a firm generates by employing its assets, net of any asset acquisitions.
You might also like to view...
According to a Gallup poll, what do people assume is the priority of traditional salespeople?
A. Recognition B. Personal pride C. Legal duties D. Self-interests E. Customer satisfaction
A ______ is defined as “an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence.”
a. value b. value statement c. value system d. value framework
Holmes, Inc has a division that manufactures a component that sells for $150 and has a variable cost of $45
Another division of the company wants to purchase the component. Fixed cost per unit of the component is $20. What is the transfer price if the division is operating at full capacity? A) $65 B) $170 C) $150 D) $20
Marketing managers are better able to predict consumer responses to marketing strategies and to develop a satisfying marketing mix if they are aware of the factors that
A. are controllable marketing forces. B. are uncontrollable marketing forces. C. affect buying behavior. D. are used to segment the market. E. are involved in the handling of consumer complaints.