Answered: Which of the following is NOT an…

Which of the following is NOT an example of a metric that companies are likely to use to measure some aspect of performance? a. Operating income b. CEO salary c. Cash flows d. Average employee tenure

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 6Q: Explain the difference between NOPAT and net income. Which is a better measure of the performance of...

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Question

Which of the following is NOT an example of a metric that companies are likely to use to measure some aspect of performance?

a. Operating income

b. CEO salary

c. Cash flows

d. Average employee tenure

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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