The Indirect Method Calculates the Net Cash Flow from Operating

question 6

Multiple Choice

The indirect method calculates the net cash flow from operating activities by adjusting net profit or loss for the effects of:

• A) Changes during the period in inventories and operating receivables and payables.
• B) Non-cash items such as depreciation,provisions,deferred taxes.
• C) All other items included in the net income for which the cash effects are investing or financing cash flows.
• D) All of these

---

Definitions:

Break-even Analysis

A financial calculation that determines when a project, product, or business will be able to cover its costs and start generating profit.

Utility

In economics and business, the total satisfaction or benefit derived from consuming a good or service.

Bottom Line

The final line in the accounts of a company or organization, showing the net profit or loss after all expenses have been accounted for.

Effect Size

A quantitative measure of the magnitude of a phenomenon, used in statistics to assess the strength of a relationship or impact of an intervention.