Collection of net income, amortization and depreciation is divided by common shares outstanding to calculate______________?
Correct answer: B. Cash flow per share
- A. Cash flow of financing activities
- B. Cash flow per share
- C. Cash flow of investment
- D. Cash flow of operationsTry Prep Courses
Explanation
Adding net income, depreciation, and amortization gives an accounting measure of cash generated, and dividing it by common shares outstanding produces cash flow per share. The other choices refer to cash-flow categories rather than a per-share measure.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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