When Preparing the Statement of Cash Flows Using the Indirect

question 27

True/False

When preparing the statement of cash flows using the indirect method, gains from financing activities are added to net income to arrive at cash flows from operating activities.

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Definitions:

New Assets

Items of value that are acquired or added to a company's or individual's holdings, which have the potential to generate income or increase net worth.

Enterprise Multiple

A valuation metric that compares a company's enterprise value to its earnings before interest, taxes, depreciation, and amortization (EBITDA).

Enterprise Value

A measure of a company's total value, often used as a more comprehensive alternative to equity market capitalization.

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization, a measure of a company's overall financial performance.