Series 79: Use Of Cash

Taken from our FINRA Investment Banking Exam

Definition of the term Use Of Cash...

a reduction in net cash flow. Includes deductions that must be made when converting net income into net cash flow. For example, an increase in accounts receivable increases net income, but does not increase net cash flow. The need to subtract it back out when converting from net income to net cash flow makes the increase in accounts receivable a use of cash.

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