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Concept Introduction:
Cash Flow: Cash flow is the net effect of inflow and outflow of cash. A positive cash flow shows the surplus of the cash and a negative cash flow shows the deficit of the cash in the business.
Cash Flow statement:
The Cash flow statement shows the movement of cash during a particular period. The
• Cash flows from operating activities
• Cash Flows from investing activities
• Cash flows from financing activities
(Note: Cash flows from operating activities can be prepared using direct or indirect method)
Price Earnings Ratio:
The price earnings ratio shows the relationship between price of the share and earnings per share. It is calculated with the help of following formula:
Requirement-1:
To discuss: The definition of Cash flow given by Fool’s School
Requirement-2:
To discuss: The importance of EBIT for analysts
Requirement-3:
To write: A report on the Fool’s ratio
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Chapter 16 Solutions
Loose Leaf for Fundamentals of Accounting Principles and Connect Access Card
- What was her capital gains yield? General accountingarrow_forwardL.L. Bean operates two factories that produce its popular Bean boots (also known as "duck boots") in its home state of Maine. Since L.L. Bean prides itself on manufacturing its boots in Maine and not outsourcing, backorders for its boots can be high. In 2014, L.L. Bean sold about 450,000 pairs of the boots. At one point during 2014, it had a backorder level of about 100,000 pairs of boots. L.L. Bean can manufacture about 2,200 pairs of its duck boots each day with its factories running 24/7. In 2015, L.L. Bean expects to sell more than 500,000 pairs of its duck boots. As of late November 2015, the backorder quantity for Bean Boots was estimated to be about 50,000 pairs. Question:arrow_forwardWhat was her capital gains yield?arrow_forward
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