Which of the Following Equations Relating to a Company's Statements

question 8

Multiple Choice

Which of the following equations relating to a company's statements of financial performance is incorrect?

• A)Operating profit - Interest = Profit before tax.
• B)Revenues - Cost of sales = Gross profit.
• C)Profit before tax - Tax expense = Profit for the period.
• D)Gross profit - Tax expense - Interest expense = Operating profit.

Understand the responsibilities and roles within corporate financial management and governance structures.

Distinguish between the types of markets for trading securities and their characteristics.

Understand the structure and functions of various stock exchanges.

Recognize the advantages and disadvantages of different forms of business ownership.

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Definitions:

Arbitrary Value

A value that is decided without a specific standard or measure, often based on personal judgment or preference.

Annual Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity, over the course of a year.

Required Rate

typically refers to the minimum expected rate of return on an investment, necessary for it to be considered a viable option.

Required Rate

The minimum anticipated return an investor expects to achieve on an investment.