Which of the Following Statements Accurately Describes the Cash Flow

question 101

Multiple Choice

Which of the following statements accurately describes the cash flow statement?

• A)It shows the link between profit and earnings per share.
• B)It indicates when long-term debt will mature.
• C)It shows the relative proportion of debt and assets.
• D)It shows the link between accrual-based income and the cash reported on the balance sheet.

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Definitions:

Dividend Payout Ratio

The fraction of earnings a company pays out to its shareholders as dividends, represented as a percentage of its net income.

Financial Statement

Formal records of the financial activities and position of a business, person, or other entity, typically including balance sheet, income statement, and cash flow statement.

External Financing

External financing is the process of obtaining funds from outside sources, such as banks, investors, or financial markets, to support a company's operations or expansion.

Sales Capacity

Refers to the maximum level of sales that can be achieved within a given period under normal operating conditions, considering the company's resources and market demand.