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1) Liquidity: What does liquidity measure? Explain the tradeoff a firm faces between high and low liquidity levels? 2

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1) Liquidity: What does liquidity measure? Explain the tradeoff a firm faces between high and low liquidity levels?

2. Accounting and Cash Flows: Why might the revenue and cost figures shown on a standard income statement not be representative of the actual cash inflows and outflows that occurred during a period?   

3. Cash Flows from Assets: Suppose a company's cash flow from assets is negative for a particular period. Is this necessarily a good sign or a bad sign?