The cash remaining with the firm after paying its operating expenses, making payments to creditors, and taxes is called:
A) earnings per share.
B) capital contributed in excess of par.
C) residual cash flow.
D) assets.

Question

Quizplus · Accepted Answer

The cash remaining after paying operating expenses, payments to creditors, and taxes is called residual cash flow. This is the amount of cash available for the firm to reinvest in the business, pay dividends to shareholders, or use for other purposes. Earnings per share (A) is a measure of profitability and is calculated by dividing net income by the number of outstanding shares. Capital contributed in excess of par (B) represents the amount of capital that investors have contributed above the par value of the stock. Assets (D) are resources that a company owns or has control over that can be used to produce future economic benefits.

The Cash Remaining with the Firm After Paying Its Operating