Question

In: Finance

​(Analyzing the quality of firm​ earnings)  ​Kabutell, Inc. had net income of $800,000​, cash flow from...

​(Analyzing the quality of firm​ earnings)  ​Kabutell, Inc. had net income of $800,000​, cash flow from financing activities of $70,000​, depreciation expenses of $60,000​, and cash flow from operating activities of $600,000.

a.  Calculate the quality of earnings ratio. What does this ratio tell​ you?

b.  ​Kabutell, Inc. reported the following in its annual reports for 2011-2013

​ ($ million)

2011

2012

2013

  Cash Flow from Operations

​$478

​$405

​$468

  Capital Expenditures​ (CAPEX)

​$457

​$446

​$458

Calculate the average capital acquisitions ratio over the​ three-year period. How would you interpret these​ results?

Solutions

Expert Solution


Related Solutions

Determining Net Income from Net Cash Flow from Operating Activities Curwen Inc. reported net cash flow...
Determining Net Income from Net Cash Flow from Operating Activities Curwen Inc. reported net cash flow from operating activities of $193,000 on its statement of cash flows for the year ended December 31. The following information was reported in the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method: Decrease in income taxes payable $3,700 Decrease in inventories 9,300 Depreciation 14,300 Gain on sale of investments 6,400 Increase in accounts payable 2,600 Increase...
Determining Net Income from Net Cash Flow from Operating Activities Sanhueza, Inc., reported a net cash...
Determining Net Income from Net Cash Flow from Operating Activities Sanhueza, Inc., reported a net cash flow from operating activities of $159,500 on its statement of cash flows for the year ended December 31, 2016. The following information was reported in the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method: Decrease in income taxes payable $3,400 Decrease in inventories 8,500 Depreciation 13,100 Gain on sale of investments 5,900 Increase in accounts payable...
Determine earnings before interest and taxes, net income, and also the cash flow from operations for...
Determine earnings before interest and taxes, net income, and also the cash flow from operations for the following firm: $500,000 sales, $10,000 cash dividends, $300,000 cost of goods sold, $20,000 administrative expense, $20,000 depreciation expense, $40,000 interest expense, $10,000 purchase of productive equipment, no changes in working capital, and a tax rate of 35%.
2. The income statement reveals net earnings (net income) of a firm for a period of...
2. The income statement reveals net earnings (net income) of a firm for a period of time. Explain how “net earnings (net income) of a firm for a period of time” is different from each of the following descriptions: ? resources and equities of a firm at a point in time Usually record ? resources and equities of a firm for a period of time ? net earnings (net income) of a firm at a point in time
Suppose Valley Technology had the following cash flow results for 2017: Net Cash Flow from Operating...
Suppose Valley Technology had the following cash flow results for 2017: Net Cash Flow from Operating Activities of $7,800,000 Net Cash Flow from Investing Activities of -$3,600,000 Net Cash Flow from Financing Activities of $1,900,000 Create a statement of cash flows with amounts in thousands. What is the Net Cash Flow? Please specify your answer in the same units as the statement of cash flows.
Suppose Stuart Company had the following cash flow results for 2017: Net Cash Flow from Operating...
Suppose Stuart Company had the following cash flow results for 2017: Net Cash Flow from Operating Activities of $5,800,000 Net Cash Flow from Investing Activities of -$4,900,000 Net Cash Flow from Financing Activities of $700,000 Create a statement of cash flows with amounts in thousands. What is the Net Cash Flow? Please specify your answer in the same units as the statement of cash flows.
Computing Diluted EPS: Stock Options Rand Inc. had net income of $800,000. During the year, 200,000...
Computing Diluted EPS: Stock Options Rand Inc. had net income of $800,000. During the year, 200,000 shares were outstanding on average and Rand's common stock sold at an average market price of $50 per share. In addition, Rand had 20,000 stock options outstanding to purchase a total of 20,000 common shares at $25 for each option exercised. Required a .A. Compute basic EPS. b. Compute diluted EPS. Note: Round earnings per share amounts to two decimal place Net Income Available...
The income statement provides accrual based earnings and the cash flow statement provides cash flows from...
The income statement provides accrual based earnings and the cash flow statement provides cash flows from operations. Which of these measures of firm performance is more important to investors, auditors, and fraud investigators? Is it possible that one of these measures can provide clues about manipulation of the other? What are some red flags that could signal manipulation of income from operations or cash flows from operating activities?
. In the last month, Cash Is King, Inc. had net income of $10,000, an increase...
. In the last month, Cash Is King, Inc. had net income of $10,000, an increase in a/r of $5,000, a decrease in a/p of $5,000, their inventories rose by $7500, they purchased computers worth $10,000, sold stock worth $100,000, and paid down their bank loans by $50,000. What was their cash flow from each of the following areas: a. Operations b. Investing Activities c. Financing Activities d. What was their total cash flow for the period?
What is the cash flow of the firm, or (CF(A)), for 2017? Exelon, Inc. 2017 Income...
What is the cash flow of the firm, or (CF(A)), for 2017? Exelon, Inc. 2017 Income Statement Net sales 13,000 Cost of goods sold 7,050 Selling, general, and administrative expenses 2,419 Depreciation 1,650 Earnings before interest and taxes 1,881 Interest 215 Pretax income 1,666 Taxes 54 Net income 1,612 Exelon, Inc. 2016 and 2017 Balance Sheets 2016 2017 2016 2017 Cash 298 306 Accounts payable 6,219 6,184 Accounts receivable 3,206 3,422 Accrued expenses 1,880 1,825 Inventory 5,210 5,950    Total...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT