4. Cash flows "Cash Is King" for all businesses You can determine a company's cash situation by analyzing the cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets. If a firm has a lot of net cash flow, does that mean the firm's balance sheet cash account must be high? Yes Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following table, identify which type of activity is described by each statement. Operating Activity Investing Activity Financing Activity Ruth Enterprises distributes a holiday bonus to all its employees. Yum Brands distributes dividends to its common stockholders for the first time. Digiink Printing co. buys new machinery to ramp up its production capacity. o O A company records a loss of $70,000 on the sale of its outdated inventory. 0 o During the last year, Exeter Enterprise Inc. generated $702.00 million in cash flow from operating activities and had negative cash flow generated from Investing activities (-384.00 million). At the end of the first year, Exeter Enterprise Inc. had $120 million in cash on its balance sheet, and the firm had $305 million in cash at the end of the second year. What was the firm's cash flow (CF) due to financing activities in the second year? $-133.00 million $99.75 million O $-66.50 million $166.25 million