1a An increase in accounts receivables reflects a Source of

1a) An increase in accounts receivables reflects a:

Source of cash because it adds to cash balance

Use of Cash because the firm must finance this

No answer text provided.

It depends on who the customer is

As long as the customer pays on time it is a source of cash

1b)If a firm increases its leverage, which extended Du Pont equation ratio is directly affected?

ROS

Total Asset Turnover

Equity Multiplier

ROA

1c) Which of the following would be classified as a use of cash?

All of the above

A decrease in accounts receivable.

A decrease in accruals.

Both b c

An increase in depreciation.

1d) From the cash conversion diagram explained in our \"course content\" two of the four events which can occur after a complete \"lap\" around the track are:

Reinvest in assets, maintain expenses

Reinvest in sales, maintain expenses

Generate Capital, reinvest in assets

None of the above

	Source of cash because it adds to cash balance
	Use of Cash because the firm must finance this

Solution

Q1a Use of Cash because the firm must finance this Q1b Equity Multiplier Q1c A decrease in accruals. Q1d Cannot answer since we don’t have your books/notes