Which Statement Is Correct

question 9

Multiple Choice

Which statement is correct?

• A)Managers are more interested in the net income than the cash generated by the company
• B)Under GAAP,only the income statement is required by investors,creditors and managers.
• C)All companies must have a treasury department to manage their cash resources.
• D)The cash flow statement shows the capacity of the company to sustain its operations.

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Definitions:

Working Capital

The dollar difference between total current assets and total current liabilities.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its short-term assets.

Net Profit Margin

A profitability ratio calculated as net income divided by revenue, expressed as a percentage, indicating how much profit a company generates from its total sales.