- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 4. Analyzing Statements of Cash Flows I
- Subject 2. Classification of Cash Flows and Non-Cash Activities
CFA Practice Question
Successful companies usually generate the largest percentage of their cash inflows (sources) in the long run from ______.
B. investing activities
C. gains on the sale of plant assets
A. operating activities
B. investing activities
C. gains on the sale of plant assets
Correct Answer: A
Companies that are financed with operating cash flows are said to be internally financed. They have less need of debt and equity financing and do not need to sell assets to meet cash needs.
User Contributed Comments 2
| User | Comment |
|---|---|
| Inaganti6 | When you have a lousy board and management in the long run the story is different! |
| dbedford | In the long run you should be making the most money from what you are in the business of doing which is all the operating costs |