Consider the following financial information of 3 companies. Company A Company B Company C Net Income...

Consider the following financial information of 3 companies.

Company A Company B Company C

Net Income $3,000 $3,000 $3,000

OCF $5,000 $4,600 $4,200

Which company's earnings are the most questionable (lowest quality)?

Company a

Company b

Company c

Expert Solution


	Company A	Company B	Company C
Net Income	$ 3,000	$ 3,000	$ 3,000
Operating Cash Flow (OCF)	$ 5,000	4,600	$ 4,200.00


Operating cash flow means Net income added back the non cash expenses , Amortization and changes
in working capital of any organiation.
So it means if Operating cash flow is positive for any organization than it is positive for any company

Lowest operating cash flow is for Company C and this company is in questionable.

Answer = Company C

ekkarill92 answered 2 years ago

Q2: Explain the following: a) Total Income b) Net Income c) Taxable Income. (Marks – 15)...

Q2: Explain the following: a) Total Income b) Net Income c) Taxable Income. (Marks – 15) (Marks – 15)

Consider the following financial statements for Sports and Company: Sports Team USA Net Income Statement Year...

Consider the following financial statements for Sports and Company: Sports Team USA Net Income Statement Year Ended June 30, 2013 (in thousands) Revenue: Broadcast rights $26,682 Ticket sales $1,689 Sponsorships $242 Total revenue $28,613 Expenses: Salaries and benefits $15,154 Professional services $7,507 Insurance $3,963 Contracted services $19 Rent and occupancy $367 Interest $385 Total expenses $27,395 Taxable Income $1,218 Taxes (34%) $414.12 Net Income $803.88 16 Sports Team USA Balance Sheet Year Ended June 30, 2013 (in thousands) Assets Cash...

Financial information on a company has just been published including the following: Net income $240 million...

Financial information on a company has just been published including the following: Net income $240 million Cost of equity 12% Dividend payout rate (paid at year end) 60% Common stock shares in issue 20 million Dividends will increase at a growth rate that steadily drops from 14% to 5% over the next four years, then will increase at 5% thereafter. The intrinsic value per share using dividend-based valuation techniques is closest to: $118 $121 $127 $145

Use the following information from separate companies a through f: Net Income (Loss) Interest Expense Income...

Use the following information from separate companies a through f: Net Income (Loss) Interest Expense Income Taxes a. $ 200,000 $ 96,000 $ 50,000 b. 194,600 75,894 70,056 c. 203,100 8,124 97,488 d. 170,000 40,800 71,400 e. 130,000 16,900 49,400 f. (56,000 ) 72,800 0 Compute times interest earned.

Use the following information from separate companies a through d: Net Income (Loss) Interest Expense Income...

Use the following information from separate companies a through d: Net Income (Loss) Interest Expense Income Taxes a. $ 102,000 $ 37,740 $ 25,500 b. 96,600 34,776 34,776 c. 86,700 34,680 36,414 d. 105,100 7,357 50,448 1a. Compute times interest earned. Company numerator / denominator = ratio / = n/a a $ / $ = n/a b $ / $ = n/a c $ / $ = n/a d $ / $ = n/a Options for the row under...

6)Consider the following voting problem: there are 3 alternatives A, B, and C. There are 3...

6)Consider the following voting problem: there are 3 alternatives A, B, and C. There are 3 voters whose preferences are as follows: Voter 1: A > B > C Voter 2: B > C > A Voter 3: C > A > B The voting procedure is as follows: first A competes with B and then the winner competes with C. If voters are strategic what is the voting outcome? Who will each voter vote for in the first stage?

Which of the following is assessed using the debt ratio? A. net income B. profitability C....

Which of the following is assessed using the debt ratio? A. net income B. profitability C. revenues D. risk of default

Consider the following information for three stocks, Stocks A, B, and C. The returns on the...

Consider the following information for three stocks, Stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is, each of the correlation coefficients is between 0 and 1.) Stock Expected Return Standard Deviation Beta A 7.94 16 0.7 B 9.62 16 1.1 C 11.72 16 1.6 Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 5%, and the market is...

Consider the following information for Stocks A, B, and C. The returns on the three stocks...

Consider the following information for Stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (that is, each of the correlation coefficients is between 0 and 1). Stock Expected Return Standard Deviation Beta A 9.55% 15.00% 0.9 B 10.45% 15.00% 1.1 C 12.70% 15.00% 1.6 Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 5.5%, and the market is in equilibrium....

Consider the following information for stocks A, B, and C. The returns on the three stocks...

Consider the following information for stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is, each of the correlation coefficients is between 0 and 1.) Stock Expected Return Standard Deviation Beta A 9.35% 15% 0.7 B 12.65 15 1.3 C 14.85 15 1.7 Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 5.5%, and the market is in equilibrium....

Question