ThisIsMyBiz 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	5,000	-5,000	-25,000
Cash flow from investing	-10,000	-25,000	-50,000
Cash flow from financing	35,000	75,000	150,000
Net change in cash	30,000	45,000	75,000
Cash, beginning of year	120,000	75,000	0
Cash, end of year	150,000	120,000	75,000
Profit (Loss) for the year	1,000	(8,000)	(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 47 (1 point)

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

Question 47 options:

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

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

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

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

e)	All are considered equally important.

Question 48 (1 point)

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

Question 48 options:

a)

growth

b)

maturity

c)

start-up

d)

decline

e)	either growth or start-up

Question 49 (1 point)

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

Question 49 options:

a)

maturity

b)

decline

c)

start-up

d)	either maturity or growth

e)

growth

Question 50 (1 point)

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Cash flow from investing activities has become less negative (i.e. increased) in 2021. Which of the following transactions can cause investing cash flow to increase>

Question 50 options:

a)	borrowing from the bank

b)	lower dividends

c)	receiving contributions from owners

d)	disposal of long-lived assets

e)	purchasing long-lived assets

f)	lower depreciation expense

Question 51 (1 point)

Cash flow from financing activities has become less positive (i.e. decreased) in 2021. Which of the following transactions can cause financing cash flow to decrease?

Question 51 options:

a)	a higher income tax rate

b)	purchase of long-lived assets

c)	increased depreciation expense

d)	disposal of long-lived assets

e)	paying down a bank loan

Question 52 (1 point)

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

Question 52 options:

a)	profitability and efficiency

b)	efficiency

c)

liquidity

d)

solvency

e)	profitability

Question 53 (1 point)

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

Question 53 options:

a)	efficiency

b)

liquidity

c)	profitability and efficiency

d)	profitability

e)

solvency

Question 54 (1 point)

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

Question 54 options:

a)	efficiency

b)

liquidity

c)

solvency

d)	profitability

e)	profitability and efficiency

Question 55 (1 point)

Which of the following is a liquidity ratio?

Question 55 options:

a)	debt-to-equity ratio

b)	debt-to-total-assets ratio

c)	current ratio

d)	days' sales in accounts receivable

e)	gross profit ratio

Question 56 (1 point)

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

Question 56 options:

a)	divide each item's amount by net sales

b)	divide each item's amount by profit

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

d)	divide the change by net sales

e)	divide the change by last year's amount

Question 57 (1 point)

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

Question 57 options:

a)	divide each item by total equity

b)	divide the change by last year's amount

c)	divide each item by total current assets

d)	divide each item by total assets

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

Question 58 (1 point)

A vertical analysis of an income statement tells you

Question 58 options:

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

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

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

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 59 (1 point)

A horizontal analysis of a balance sheet tells you

Question 59 options:

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

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

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

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

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