Question

What does a firm's net cash flow from operating activities include?

1) Cash received from customers
2) Cash paid to suppliers
3) Cash paid to employees
4) All of the above

Answer 1

A firm's net cash flow from operating activities includes cash received from customers, cash paid to suppliers, and cash paid to employees.

Step-by-step explanation:

A firm's net cash flow from operating activities includes all of the above. This means that it includes cash received from customers, cash paid to suppliers, and cash paid to employees.

For example, when a firm receives cash from customers for the goods or services it sells, it is considered a cash inflow from operating activities. On the other hand, when a firm pays cash to suppliers for the materials or supplies it purchases, it is considered a cash outflow from operating activities.