Which One of the Following Items Is Not Necessary in Preparing

question 171

Multiple Choice

Which one of the following items is not necessary in preparing a statement of cash flows?

• A) Determine the change in cash.
• B) Determine the cash provided by operations.
• C) Determine cash from financing and investing activities.
• D) Determine the cash in each of the bank accounts.

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Definitions:

Intrinsic Value

The actual, inherent value of an asset, without respect to market value or external factors.

Market Capitalization Rate

A rate that represents the return expected by investors on a security or a portfolio, typically reflective of the risk and growth prospects.

Earnings Retention Ratio

The earnings retention ratio, also known as the plowback ratio, measures the percentage of net earnings a company retains to reinvest in the business, as opposed to distributing to shareholders as dividends.

Plowback Ratio

A metric indicating the proportion of earnings retained by a company for reinvestment in its operations, rather than distributed to shareholders as dividends.