Sharma (1996)suggests that a cash-flow based measure of retained cash flows from operations (RCFFO)may be an important indicator of financial flexibility.How is RCFFO measured?
A) The level of cash retained, calculated by deducting net cash flows from investing from the net cash flows from operations.
B) The level of cash retained after meeting all operating costs and priority payments such as interest costs and dividends.
C) The level of cash retained after meeting all operating costs and deducting or adding as appropriate the cash flows from financing and investing activities.
D) The level of cash retained, calculated by deducting net cash flows from financing from the net cash flows from operations.
E) None of the given answers.

Question

Quizplus · Accepted Answer

RCFFO is measured as the level of cash retained after meeting all operating costs and priority payments such as interest costs and dividends, indicating the cash available for discretionary purposes.

Sharma (1996)suggests That a Cash-Flow Based Measure of Retained Cash