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​(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?

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jeff jeffy answered 2 years ago
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