Depreciation Expense Is Not Reported on the Statement of Cash

question 124

True/False

Depreciation expense is not reported on the statement of cash flows when the direct method is used.

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), representing the profit from core business operations excluding non-operating income and expenses.

Economic Value Added

A measure of a company's financial performance based on the residual wealth calculated by deducting cost of capital from its operating profit.

Capital Employed

The total value of all assets used in a business to generate profits, typically calculated as equity plus non-current liabilities.

Economic Value Added

A financial performance metric that calculates the value a company generates from its capital investments, beyond the cost of capital.