why-is-the-operating-section-of-the-statement-of-cash-flows-significant-when-cal

Question

Why is the operating section of the statement of cash flows significant when calculating the capital acquisitions ratio?

Accepted Answer

It provides the cash flow from operating activities, which is used as the numerator in the ratio.

Answer

It indicates the cash flow from investing activities, which is irrelevant to the ratio.

Answer

It highlights the net income, which is used to calculate the ratio.

Answer

It shows the cash flow from financing activities, which is used as the denominator in the ratio.