In the Operating Activities Section of the Statement of Cash

question 101

Multiple Choice

In the operating activities section of the statement of cash flows,we start with net income when using:

• A)The direct method.
• B)The indirect method.
• C)Both the direct and the indirect method.
• D)Neither the direct nor the indirect method.

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Definitions:

EPS Growth Rate

The rate at which a company's earnings per share (EPS) has grown or is expected to grow.

Rate of Return

The financial gain or loss encountered on an investment over a fixed term, represented as a percentage of the investment's first expenditure.

EPS

Earnings Per Share, a key indicator of a company's profitability, calculated as the company's profit divided by the number of outstanding shares.