alyzing the quality of firm earnings) Kabutell, Inc. had net income of $650,000, cash flow from financing activities of $90,000, depreciation e 000, and cash flow from operating activities of $550,000. Calculate the quality of earnings ratio. What does this ratio tell you? Kabutell, Inc. reported the following in its annual reports for 2011-2013: million) 2011 sh Flow from Operations $480 pital Expenditures (CAPEX) $458 ck on the icon in order to copy its contents into a spreadsheet.) sulate the average capital poquisitione ratio eUSE 2012 $401 $446 2013 $468 $457
alyzing the quality of firm earnings) Kabutell, Inc. had net income of $650,000, cash flow from financing activities of $90,000, depreciation e 000, and cash flow from operating activities of $550,000. Calculate the quality of earnings ratio. What does this ratio tell you? Kabutell, Inc. reported the following in its annual reports for 2011-2013: million) 2011 sh Flow from Operations $480 pital Expenditures (CAPEX) $458 ck on the icon in order to copy its contents into a spreadsheet.) sulate the average capital poquisitione ratio eUSE 2012 $401 $446 2013 $468 $457
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![(Analyzing the quality of firm earnings) Kabutell, Inc. had net income of $650,000, cash flow from financing activities of $90,000, depreciation expenses of
$60,000, and cash flow from operating activities of $550,000.
a. Calculate the quality of earnings ratio. What does this ratio tell you?
b. Kabutell, Inc. reported the following in its annual reports for 2011-2013:
($ million)
2011
Cash Flow from Operations
$480
Capital Expenditures (CAPEX)
$458
(Click on the icon in order to copy its contents into a spreadsheet.)
Calculate the average capital acquisitions ratio over the three-year period. How would you interpret these results?
2012
$401
$446
2013
$468
$457](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe9bd6f68-2f48-4cfe-850a-8bf4dd0ae8c2%2F13b67fd3-6a79-4aa8-9495-d8cd8b3bcc6c%2Fgmtwz5o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:(Analyzing the quality of firm earnings) Kabutell, Inc. had net income of $650,000, cash flow from financing activities of $90,000, depreciation expenses of
$60,000, and cash flow from operating activities of $550,000.
a. Calculate the quality of earnings ratio. What does this ratio tell you?
b. Kabutell, Inc. reported the following in its annual reports for 2011-2013:
($ million)
2011
Cash Flow from Operations
$480
Capital Expenditures (CAPEX)
$458
(Click on the icon in order to copy its contents into a spreadsheet.)
Calculate the average capital acquisitions ratio over the three-year period. How would you interpret these results?
2012
$401
$446
2013
$468
$457
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