here to learn 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 No 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. cory Operating Activity Investing Activity Financing Activity O The Yum chain of restaurants conducts an initial public offering to raise funds for expansion. Digitnk Printing Co. buys new machinery to ramp up its production capacity. D and W Co. sells its last season's inventory to a discount store. A company reports a 10% increase in its accounts payable from the last month. 0 10