Use the Equation Presented Below to Answer the Question That

question 35

Multiple Choice

Use the equation presented below to answer the question that follows: Cash = CL + LTL + CS + RE - NCCA - LTA

where: $\begin{array}{l}\text { CL = Current li abilities } \\\text { LTL = Long-term liabilities } \\\text { CS = Common stock } \\\text { RE = Retained earnings } \\\text { NCCA = Noncash current assets } \\\text { LTA = Long-term assets }\end{array}$
- Which of the following activities results in a cash inflow?

• A)Increases in noncash current assets (NCCA)
• B)Decreases in current liabilities (CL)
• C)Increases in common stock (CS)
• D)Decreases in retained earnings (RE)

---

Definitions:

Total Equity

The residual interest in the assets of an entity after deducting liabilities; essentially, it represents the ownership value in the firm.

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively management is using a company’s assets to create profits.

Total Debt Ratio

A financial metric that compares the total amount of a company's debt to its total assets, indicating the extent to which a company's operations are financed by debt.

Net Working Capital Turnover

A measure of how effectively a company is using its net working capital to generate sales.