Cash flow from operating activities calculates the inflow and outflow of cash from day-to-day activities. It includes operating income and operating expenses for the year. Cash and cash equivalents are highly liquid short-term investment for that can be easily converted to cash within the period of 3 months or less. To state: Whether the positive cash flow from operating activities means that cash and cash equivalents increase each year or not.

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Chapter 11, Problem 15DQ

To determine

Introduction:

Cash flow from operating activities calculates the inflow and outflow of cash from day-to-day activities. It includes operating income and operating expenses for the year. Cash and cash equivalents are highly liquid short-term investment for that can be easily converted to cash within the period of 3 months or less.

To state:

Whether the positive cash flow from operating activities means that cash and cash equivalents increase each year or not.

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