A cumulative cash deficit indicates a firm___________.A. Is capable of funding all of its needs internally.B. Is facing long-term financial distress.
C. Has at least a short-term need for external funding.
D. Will go out of business within the year.
E. Is using its cash wisely.
The correct answer is (c)
A cash deficit means that the expenses are greater than the profits or revenues. It can lead to various problems, such as bankruptcy and low cash reserves. A cumulative cash deficit shows that the retained earnings are negative after paying for expenses and dividends. It also indicates that a firm has at least a short-term need for external funding.
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Business, published 27.03.2023
She sells seashells on a seashore But the value of these shells will fall Due to the laws of supply and demand No one wants to buy shells 'cause there's loads on the sandStep 1: you must create a sense of scarcity Shells will sell much better if the people think they’re rare, you see Bare with me, take as many shells as you can find and hide 'em on an island...