Question #15
Reading: Reading 13 Integration of Financial Statement Analysis Techniques
PDF File: Reading 13 Integration of Financial Statement Analysis Techniques.pdf
Page: 7
Status: Correct
Correct Answer: B
Question
If segmental cash flow data has not been reported, we can most appropriately approximate cash flow as:
Answer Choices:
A. operating cash flow − cash interest − cash taxes
B. EBIT + depreciation + amortization
Explanation
We are most likely to approximate segment cash flow as EBIT plus depreciation and
amortization. This calculation is necessary because segmental cash flow data is generally
not reported.