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 76 (1 point)

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

Question 76 options:

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

b)	All are considered equally important.

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

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

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

Question 77 (1 point)

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

Question 77 options:

a)

maturity

b)

start-up

c)

growth

d)	either growth or start-up

e)

decline

Question 78 (1 point)

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

Question 78 options:

a)	either maturity or growth

b)

start-up

c)

maturity

d)

growth

e)

decline

Question 79 (1 point)

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 79 options:

a)	lower dividends

b)	lower depreciation expense

c)	borrowing from the bank

d)	disposal of long-lived assets

e)	purchasing long-lived assets

f)	receiving contributions from owners

Question 80 (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 80 options:

a)	purchase of long-lived assets

b)	increased depreciation expense

c)	a higher income tax rate

d)	disposal of long-lived assets

e)	paying down a bank loan

Question 81 (1 point)

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

Question 81 options:

a)	profitability

b)	efficiency

c)

solvency

d)

liquidity

e)	profitability and efficiency

Question 82 (1 point)

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

Question 82 options:

a)	efficiency

b)	profitability

c)

solvency

d)	profitability and efficiency

e)

liquidity

Question 83 (1 point)

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

Question 83 options:

a)

liquidity

b)	profitability and efficiency

c)

solvency

d)	efficiency

e)	profitability

Question 84 (1 point)

Which of the following is a liquidity ratio?

Question 84 options:

a)	debt-to-equity ratio

b)	debt-to-total-assets ratio

c)	days' sales in accounts receivable

d)	gross profit ratio

e)	current ratio

Question 85 (1 point)

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

Question 85 options:

a)	divide each item's amount by net sales

b)	divide each item's amount by profit

c)	divide the change by last year's amount

d)	divide the change by net sales

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

Question 86 (1 point)

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

Question 86 options:

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

b)	divide each item by total equity

c)	divide each item by total assets

d)	divide each item by total current assets

e)	divide the change by last year's amount

Question 87 (1 point)

A vertical analysis of an income statement tells you

Question 87 options:

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

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

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

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

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

Question 88 (1 point)

A horizontal analysis of a balance sheet tells you

Question 88 options:

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

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

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

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

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