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The Net Increase (Or Decrease) in Cash That Is Reported

question 20

True/False

The net increase (or decrease) in cash that is reported on the statement of cash flows should be the same as the change in the balance of the cash account for the two most recent years on the comparative statements of financial position.


Definitions:

Net Income

The profit of a company after all expenses and taxes have been deducted from total revenue.

EBIT

Earnings Before Interest and Taxes, a firm's earnings metric, accounts for all operational expenses aside from interest and taxes.

Return on Equity Ratio

The return on equity ratio measures a company's profitability by revealing how much profit a company generates with the money shareholders have invested.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue by comparing sales with total assets.

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