Which of the following is a positive Cash Throw-Off characteristic?

• A. Increase current assets.
• B. Increase in fixed assets.
• C. Decrease in current liabilities.
• D. Decrease long term liabilities.

Answer: (A)

A positive cash throw-off means the change in the balance sheet tends to increase the cash available to service debt or fund operations. An increase in current assets is considered positive because it often signals more resources that will convert to cash in the near term—receivables collected or inventory turning into sales—boosting near-term liquidity and the cash that can be thrown off for uses like debt service. In contrast, investing in fixed assets requires cash outlay, while reducing current liabilities or reducing long-term liabilities entails cash outflows (paying down obligations). Therefore, increasing current assets most directly enhances the cash that can be used going forward, making it the best choice.