MyBiz Inc. has been your business for the past several years. You have put together your cash flow statements for the past 3 years to get a better idea of how your business is managing cash flow.

Year ending December 31	2021	2020	2019
Cash flow from operations	-56,000	-30,000	40,000
Cash flow from investing	20,000	15,000	-5,000
Cash flow from financing	-10,000	20,000	25,000
Net change in cash	-46,000	5,000	60,000
Cash, beginning of year	197,000	192,000	132,000
Cash, end of year	151,000	197,000	192,000
Profit for the year	(55,000)	(25,000)	35,000

The next five questions relate to the cash flow statements below. The rest of the questions in this section of the exam are independent.

Question 29 (1 point)

Which section of the cash flow statement is considered the most important? Why?

Question 29 options:

a)	operating, because it is the only sustainable source of cash

b)	the change in cash, because it shows the year-over-year difference

c)	investing, because it shows how much the company has spent on long-lived assets

d)	financing, because it shows how much the company has borrowed

e)	All are considered equally important.

Question 30 (1 point)

Which life-cycle stage was the business most likely in, back in 2019?

Question 30 options:

a)	either growth or maturity

b)

decline

c)

growth

d)

start-up

e)

maturity

Question 31 (1 point)

Which life-cycle stage is the business most likely in by 2021?

Question 31 options:

a)

growth

b)

start-up

c)	either maturity or decline

d)

maturity

e)

decline

Question 32 (1 point)

Cash flow from investing activities has gone from negative to positive over the years. Which of the following transactions can cause investing cash flow to increase?

Question 32 options:

a)	disposal of long-lived assets

b)	lower dividends

c)	lower depreciation expense

d)	receiving contributions from owners

e)	purchasing long-lived assets

f)	borrowing from the bank

Question 33 (1 point)

Cash flow from financing activities has gone from positive to negative over the years. Which of the following transactions can cause financing cash flow to decrease?

Question 33 options:

a)	increased depreciation expense

b)	a higher income tax rate

c)	disposal of long-lived assets

d)	purchase of long-lived assets

e)	paying down a bank loan

Question 34 (1 point)

Which type of financial ratio can be calculated from both income statement and balance sheet figures?

Question 34 options:

a)	efficiency

b)	profitability and efficiency

c)

solvency

d)	profitability

e)

liquidity

Question 35 (1 point)

Which type of financial ratio tells you how well a company can cover its long-term liabilities?

Question 35 options:

a)

solvency

b)	efficiency

c)

liquidity

d)	profitability

e)	profitability and efficiency

Question 36 (1 point)

Which type of financial ratio tells you how well a company can cover its current liabilities?

Question 36 options:

a)	profitability

b)

solvency

c)	efficiency

d)	profitability and efficiency

e)

liquidity

Question 37 (1 point)

Which of the following is a liquidity ratio?

Question 37 options:

a)	debt-to-total-assets ratio

b)	current ratio

c)	debt-to-equity ratio

d)	gross profit ratio

e)	days' sales in accounts receivable

Question 38 (1 point)

In a horizontal analysis of an income statement, what is the correct formula to calculate the percentages?

Question 38 options:

a)	divide the change by last year's amount

b)	divide the change by net sales

c)	divide each item's amount by last yeat's amount

d)	divide each item's amount by profit

e)	divide each item's amount by net sales

Question 39 (1 point)

In a vertical analysis of a balance sheet, what is the correct formula to calculate the percentages?

Question 39 options:

a)	divide the change by last year's amount

b)	divide each asset item by total assets and divide each liabiity item by total liabilities

c)	divide each item by total current assets

d)	divide each item by total assets

e)	divide each item by total equity

Question 40 (1 point)

A vertical analysis of an income statement tells you

Question 40 options:

a)	how a specific item has changed from year to year.

b)	the portion of net sales represented by each line on the statement.

c)	whether or not a company is more profitable than its competitors.

d)	how much cash the company has and whether or not it can pay its debts.

e)	whether or not a company is a going concern.

Question 41 (1 point)

A horizontal analysis of a balance sheet tells you

Question 41 options:

a)	the portion of total assets that a particular asset comprises

b)	how a particular item has changed from year to year

c)	whether or not a company is more profitable than its competitors.

d)	whether or not a company is a going concern.

e)	how much cash the company has and whether or not it can pay its debts.