Which of the following is NOT a reason why cash flow may not equal net income?
A: Amortization is added in when calculating net income.
B: Changes in inventory will change cash flows but not income.
C: Capital expenditures are not recorded on the income statement.
D: Depreciation is deducted when calculating net income.
A: Amortization is added in when calculating net income.
B: Changes in inventory will change cash flows but not income.
C: Capital expenditures are not recorded on the income statement.
D: Depreciation is deducted when calculating net income.
举一反三
- Which of the following statements regarding depreciation expense in the cash flow statements is TRUE Depreciation is: A: added back to net income when determining CFO using the direct method. B: added back to net income when determining CFO using the indirect method. C: considered a cash item.
- The retention ratio can be computed as: A: 1 − Plowback ratio. B: (Change in retained earnings + Cash dividends)/Net income. C: Change in retained earnings/Cash dividends. D: 1 − (Cash dividends/Net income).
- Which financial statement reports net income and dividends?（ ）。 A: Income Statement B: Statement of Cash Flows C: Statement of Retained Earnings D: Balance Sheet
- Net income is $500m, depreciation is $100m, capital expenditures and debt repayment is $50m and $150m respectively. What is the amount of free cash flow to equity?
- Which of the following items is included in the adjustment of net income to obtain cash flow from operating activities? ( ) A: Depreciation expense for the period. B: dividend C: The amount by which equity income recognized exceeds cash received. D: The change in deferred taxes.