Step 6 in the PREPARE Process Is To

question 47

Multiple Choice

Step 6 in the PREPARE process is to:

• A) Review professional and personal risk
• B) Relate findings to agency administrators
• C) Provide a rationale for the proposed macro change

Determine the net working capital and its changes over time.

Understand the importance of operating cash flow in business operations.

Analyze shareholders' equity and understand how it can change over a period.

Evaluate the financial position through net working capital and shareholders' equity.

---

Definitions:

Consolidated Stockholders' Equity

The total equity in a conglomerate of all the shareholders combined, as if the conglomerate and its subsidiaries were a single entity.

Investment Income

Income received from investment assets, including dividends, interest, and capital gains.

Book Value

The amount of value remaining in a company's assets, after accounting for depreciation and amortization, that shareholders would theoretically receive if assets were liquidated.

IntrA-Entity Gains

Profits realized from transactions occurring within the same company, often between different divisions or subsidiaries.