If anyone wants to do my homework for me, please fill in some answers.... PS - it's economics.
Question 1: (10 points)
For a particular year, in a given firm, why would net income be different from the cash flow from operating activities?
Question 2: (10 points)
Why are financial ratios calculated? In order to calculate them and interpret them correctly in the context of a particular company, what other information besides the company’s financial statements is required.
Question 3: (20 points)
Company ABC
Current Assets:
Cash = 100
Acc Receivable = 40
Inventory = 10
Current Liabilities:
short term debt = 75
What is company ABC’s current ratio. What is the simplest step the company can take to make this ratio exactly 3:1.
Question 4:
State whether the following statements are true or false. Please provide a brief explanation to justify your answers (20 points)
1. If a company makes a loss in a particular year, its retained earnings should go up.
2. Interest Expense for a particular year, is indicated on the balance sheet. Interest payable is indicated on the income statement.
3. Depreciation is a non-cash expense.
4. The market value and the book value for a company is always the same.