A Higher Score in a Typical Questionnaire for Credit Scoring

question 88

True/False

A higher score in a typical questionnaire for credit scoring analysis indicates a higher creditworthiness.

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Definitions:

Indirect Method

A way of calculating cash flows for operational activities by starting with net income and adjusting for non-cash transactions.

Net Income

The total profit of a company after all expenses, including taxes and interest, have been deducted from revenues.

Direct Method

A method of preparing the cash flow statement where actual cash flow information from the company’s operations segment is used directly.

Indirect Method

A way of calculating cash flows from operating activities for the cash flow statement by adjusting net income for changes in non-cash items.