The Comparison of Profit or Loss with Net Cash from Operating

question 55

Short Answer

The comparison of profit or loss with net cash from operating activities can shed light on how well an entity is managing its ______________ _____________.

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Definitions:

Operating Income

A measure of a company's profit generated from its core business operations, excluding deductions of interest and tax.

Operating Leverage

An indicator of the extent to which increases in sales revenue result in an increase in operating profit, showing the level of fixed expenses within a business's cost composition.

Sales Impact

The effect of marketing and sales activities on the volume or value of product sales.

Margin of Safety

The difference between actual sales and break-even sales, indicating the extent to which sales can drop before losses occur.