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Which of the Following Statements Concerning the Cash Adequacy Ratio

Question 12

Multiple Choice

Which of the following statements concerning the cash adequacy ratio is true?


A) It measures the entity's ability to reinvest in its operations and to make distributions to owners from its operating cash flow.
B) It expresses the cash flow from operating activities as a percentage of capital expenditure plus dividends.
C) A ratio result greater than one suggests a good performance.
D) All of the statements are true.

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