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 19 (1 point) Saved Which section of the cash flow statement is considered the most important? Why? O a) investing, because it shows how much the company has spent on long-lived assets b) operating, because it is the only sustainable source of cash O c) financing, because it shows how much the company has borrowed d) All are considered equally important. e) the change in cash, because it shows the year-over-year difference no Which life-cycle stage was the business most likely in, back in 2019? Oa) a) growth b) either growth or start-up c) start-up d) decline e) maturity Question 21 (1 point) Which life-cycle stage is the business most likely in by 2021? a) decline ) b) start-up c) growth d) either maturity or growth e) maturity Question 22 (1 point) Cash flow from investing activities has become less negative (i.e. increased) in 202 Which of the following transactions can cause investing cash flow to increase> a) lower depreciation expense b) lower dividends C) purchasing long-lived assets d) disposal of long-lived assets e) receiving contributions from owners Of) borrowing from the bank Question 23 (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? a) disposal of long-lived assets b) purchase of long-lived assets c) a higher income tax rate 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? a) disposal of long-lived assets b) purchase of long-lived assets Oc) a higher income tax rate d) increased depreciation expense e) paying down a bank loan Question 24 (1 point) Which type of financial ratio can be calculated from both income statement and balance sheet figures? a) profitability b) profitability and efficiency c) liquidity d) solvency Which type of financial ratio tells you how well a company can cover its long-term liabilities? a) profitability and efficiency b) solvency c) liquidity d) efficiency e) profitability Question 26 (1 point) Which type of financial ratio tells you how well a company can cover its current liabilities? a) liquidity b) solvency OC c) profitability d) profitability and efficiency e) efficiency Which of the following is a liquidity ratio? a) current ratio b) gross profit ratio C) days' sales in accounts receivable d) debt-to-total-assets ratio e) debt-to-equity ratio Question 28 (1 point) In a horizontal analysis of an income statement, what is the correct formula to calculate the percentages? a) divide the change by last year's amount b) divide each item's amount by net sales c) divide each item's amount by profit d) divide each item's amount by last yeat's amount e) divide the change by net sales In a vertical analysis of a balance sheet, what is the correct formula to calculate the percentages? a) divide each item by total assets Ob) divide each asset item by total assets and divide each liabiity item by total liabilities c) divide each item by total equity d) divide each item by total current assets e) divide the change by last year's amount Question 30 (1 point) A vertical analysis of an income statement tells you a) how a specific item has changed from year to year. Ob) 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) whether or not a company is a going concern. O e) how much cash the company has and whether or not it can pay its debts