Asked by Colin Stubblefield on Jul 01, 2024
Which statement about the income statement is true?
A) The focal point of the income statement is the cash account, because that account cannot be manipulated by "accounting tricks."
B) EBITDA is a truer measure of financial strength than are net income and free cash flow.
C) If a firm follows the International Financial Reporting Standard (IFRS) , its reported net income and net cash flow will be the same.
D) The income statement for a given year is designed to give us an idea of how much the firm earned during that year.
EBITDA
Earnings before interest, taxes, depreciation, and amortization.
Financial Strength
A measure of a company’s ability to meet its financial commitments, indicating its overall financial stability.
International Financial Reporting Standard
A set of accounting standards developed by the International Accounting Standards Board (IASB) that is used globally to prepare public company financial statements.
- Understand fundamental financial reports and their elements for analyzing businesses.
Learning Objectives
- Understand fundamental financial reports and their elements for analyzing businesses.