How Is Total Shareholder Value Calculated

question 24

Multiple Choice

How is total shareholder value calculated?

• A) By adding the value of cash flows from profitable operations and the value of operating assets
• B) By subtracting the shareholder value of free cash flows from operations from the value of non- operating assets
• C) By adding the shareholder value of free cash flows from operations and the value of non- operating assets
• D) By subtracting the value of non- operating assets from the shareholder value of free cash flows from operations

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Definitions:

Accounts Payable

The amount a company owes to suppliers or vendors for goods or services received but not yet paid for.

Debit

An entry recorded on the left side of a bookkeeping ledger for a transaction that increases asset or expense accounts, or decreases liability, equity, or revenue accounts.

Sales Tax Payable

A liability account that records the amount of sales tax collected from customers, which is owed to the government.

Normal Balance

Represents the side (debit or credit) of an account that increases its value, based on the double-entry accounting system.