Inventory Increases Are Added to Profit to Arrive at the Operating

question 11

True/False

Inventory increases are added to profit to arrive at the operating cash flow.

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Definitions:

Financial Risk

The chance of experiencing financial loss from an investment or enterprise because of different economic elements.

ROA

Return on Assets is a measure of how effectively a company uses its assets to generate profit, calculated as net income divided by total assets.

ROE

Return On Equity, a measure of financial performance calculated by dividing net income by shareholders' equity.

Financial Leverage

The use of borrowed funds to increase a company's investment potential, which can amplify both potential returns and potential losses.