Last year Delip Industries had negative cash flow from operations

Question

Last year, Delip Industries had (1) negative cash flow from operations, (2) a negative free cash flow, and (3) an increase in cash as reported on its balance sheet. Which of the following factors could explain this situation?

a. The company had a sharp increase in its inventories.

b. The company had a sharp increase in its accrued liabilities.

c. The company sold a new issue of common stock.

d. The company made a large capital investment early in the year.

e. The company had a sharp increase in depreciation expenses.

Answer

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