Explain the "Stretch" Technique

question 63

Essay

Explain the "stretch" technique.

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Definitions:

Statement Of Cash Flows

A financial statement showing the cash inflows and outflows from a company's operating, investing, and financing activities over a period.

Indirect Method

A financial reporting approach used in cash flow statements to reconcile net income with cash flow from operating activities by adjusting for non-cash transactions.

Goodwill

An intangible asset that arises when a buyer acquires an existing business, representing the premium paid over the fair value of the net identifiable assets.

Voting Stock

Shares that give the stockholder the right to vote on matters of corporate policy making and the election of the board of directors.