The End Goal of Preparing the Statement of Cash Flows

question 56

True/False

The end goal of preparing the statement of cash flows is to show what caused the change in cash from the beginning of the period to the end of the period.

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Definitions:

EPS

Earnings Per Share; a company's profit divided by the outstanding shares of its common stock, indicating company profitability on a per-share basis.

EBIT

Earnings Before Interest and Taxes, a measure of a firm's profitability that excludes interest and income tax expenses.

EBIT

A profitability metric that calculates a company's profits excluding interest and income tax expenses.

Degree of Financial Leverage

A ratio indicating the degree to which a company uses borrowed funds to finance its operations, affecting potential returns and risk.