Net Income for the Year Was $45,500

question 96

Multiple Choice

Net income for the year was $45,500. Accounts receivable increased by $5,500, and accounts payable increased by $11,200. Under the indirect method, the cash flow from operations is

• A) $51,200
• B) $45,500
• C) $62,200
• D) $28,800

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Definitions:

Equity Multiplier

A financial leverage ratio that measures the portion of a company’s assets that are financed by its shareholders' equity.

Quick Ratio

A liquidity metric that measures a company's ability to meet its short-term obligations with its most liquid assets.

Debt-Equity Ratio

The ratio showing the blend of debt and equity financing in a company’s strategy for asset accumulation.

Common-Base Year Value

A financial analysis technique in which all figures are expressed in relation to a certain base year, allowing for comparison over time by setting a common reference point.