Which Statement Concerning the Cash Flow Adequacy Ratio Is Incorrect

Multiple Choice

Which statement concerning the cash flow adequacy ratio is incorrect?

A) A ratio of 100% or more over several years indicates an inadequate ability to generate sufficient operating cash to cover requirements.
B) The ratio assesses the entity's ability to generate sufficient operating cash flow to cover its main cash requirements.
C) The main requirements for cash from operations is to pay debts, acquire assets and pay dividends.
D) A fall in the ratio indicates a lower ability to generate operating cash to meet requirements.