16. Collection of a loan is reported as an investing activity in the statement of cash flows.
17. Companies determine cash provided by operating activities by converting net income on an accrual basis to a cash basis.
18. Significant financing and investing activities that do not affect cash are not reported in the statement of cash flows or any other place.
19. Financial statement readers often assess liquidity by using the current cash debt coverage ratio.
20. Free cash flow is net income less capital expenditures and dividends.
21. Which of the following is a limitation of the balance sheet?
a. Many items that are of financial value are omitted.
b. Judgments and estimates are used.
c. Current fair value is not reported.
d. All of these
22. The balance sheet is useful for analyzing all of the following except
d. financial flexibility.
23. Balance sheet information is useful for all of the following except to
a. compute rates of return
b. analyze cash inflows and outflows for the period
c. evaluate capital structure
d. assess future cash flows
24. Balance sheet information is useful for all of the following except
a. assessing a company’s risk
b. evaluating a