Cash Flow ChallengeOnline version Test your knowledge of the Finance Academy "Cash Flow" with this quiz game. by Miguel Escorcia 1 What is cash flow? a It is the movement of cash in and out of a company. b This is the cash that goes to pay taxes. c The total value of a company's assets. d This is the amount of money a company has to spend on operating expenses. 2 What could a negative cash flow indicate? a That the company has no debts. b That the company is generating high profits. c That the company has excess cash. d That the company is spending more cash than it takes in. 3 What is the main objective of managing cash flow? a To ensure the liquidity and solvency of the company. b Reduce operating costs. c Increase market share. d Maximise the company's profits. 4 Within the 2 methods of calculating cash flow, which type of flow is calculated different? a Financing b Operative c Investing d Free Cash Flow 5 What is one of the pros of repurchasing shares? a It increases the value of the shares because it reduces the number of existing shares. b Lowering the price of shares circulating in the market. c Represents a decrease in earnings by share d There are no tax implications when selling the shares and obtaining a capital gain. 6 What are examples of operating outflows at Mattel? a Sale of assets, media and inventories b Suppliers, dividends and inventories. c Suppliers, taxes and inventories. d Interests gained, media and suppliers. 7 What is the purpose of Mattel International Finance (iBank)? a Lending only. b To safeguard Mattel's cash, with no option to borrow. c Collection of excess cash. d Cash management, where if you have excess cash, you hand it over and when you are short, you borrow. 8 What is inventory prepayment? a Excess cash held to pay inventory b Analysis and calculation of the inventory that will be needed to satisfy the market demand. c A method of making advance payments for stocks by taking advantage of exchange rate benefits. d Meeting market demand in advance. 9 At what point does Mattel's local investment take place? a Investments are only made on the instructions of Mattel Corp. b When no further payments are to be made during the day, the remaining cash is invested in a promissory note with daily liquidity. c Only when the market is performing well. d There is no local investment. 10 What is the importance of cash flow? a Helps to know how much profit the company generates over a period of time. b It gives an exact idea of how much money a company is making, paying and, in other words, operating. c helps to identify an entity's assets, liabilities and stockholders' equity d helps you to know how much share repurchase you will need to do over a period of time.
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