Quality of Earnings: Companies face artificial profits such as inflation of inventory created by accounting anomalies. Quality of earnings refer to the earnings of a company which refer to lower costs or higher sales and not the aforesaid profits. When an industry faces high inflation, the quality of earnings become very low. To identify and explain: The factors that affect quality of earnings.

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Chapter 13, Problem 5Q

To determine

Quality of Earnings:

Companies face artificial profits such as inflation of inventory created by accounting anomalies. Quality of earnings refer to the earnings of a company which refer to lower costs or higher sales and not the aforesaid profits. When an industry faces high inflation, the quality of earnings become very low.

To identify and explain:

The factors that affect quality of earnings.

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