explain how Value drivers are related to financial statement analysis and explain their behavior over time. Can a company reply on net income as a valid measure of cash needed to pay fixed charges? Explain you answer Explain why companies do not include principle payment requirement when calculating earnings to fixed charges ratio.

explain how Value drivers are related to financial statement analysis and explain their behavior over time. Can a company reply on net income as a valid measure of cash needed to pay fixed charges? Explain you answer Explain why companies do not include principle payment requirement when calculating earnings to fixed charges ratio.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter3: Accrual Accounting

Section: Chapter Questions

Problem 1MCQ: Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a...

See similar textbooks

Similar questions

a.What are the drivers to the cost of revenue and the trends? b. Are there any trends in sales and marketing expenses or research and development? Are these amounts reasonable for the type of business? c. Compare general and administrative expenses . Are they reasonable? d. What is the ratio of net interest income (expense) to income from operations? Is this a safe ratio for the company? Why or why not?
istinguish between cash-basis accounting and accrual-basis accounting. Why is accrual-basis accounting acceptable for most businesses and the cash-basis unacceptable in the preparation of an income statement and a balance sheet?
If a company shows a profit on its Income Statement, how will this affect (a) the Balance Sheet and (b) Cash Flow?
Which of the following best describes the information reported in the income statement? Multiple Choice The current resources available to pay current obligations. The portion of profits paid in cash to stockholders. The extent to which cash inflows exceed cash outflows. The amount recognized from providing goods and services to customers compared to the cost of doing so.
a. What do the accounting policies say in the annual report (footnotes) regarding the cost of revenue? What are the drivers to the cost of revenue and the trends? b. Are there any trends in sales and marketing expenses or research and development? Are these amounts reasonable for the type of business? c. Compare general and administrative expenses to similar companies. Are they reasonable? d. What is the ratio of net interest income (expense) to income from operations? Is this a safe ratio for the company? Why or why not?
Distinguish between cash-basis accounting and accrualbasisaccounting. Why is accrual-basis accounting acceptablefor most businesses and the cash-basis unacceptable inthe preparation of an income statement and a balance sheet?
Studying GAAP Accrual accounting. There is also cash-basis accounting which does not comply with GAAP. Distinguish between cash-basis accounting and accrual-basis accounting. Why is accrual-basis accounting acceptable for most businesses and the cash-basis unacceptable in the preparation of an income statement and a balance sheet?
Is the Profit that a business makes a reliable indicator of its cash balances? What are the differences between Profit and Cash? (please, for detailed answer, thank you !)
Which of the following has a different effect on net profit than it does on cashflow? A.Cash sale to customer B.Payment for wages C.Payment for rent D.Depreciation of equipment
explain how the accounts receivable and inventory should be valued on the financial statements. if the business was to apply the correct measurement basis, determine the effect on: (1) profit and (2) assets. explain the difference between cash and accrual basis methods of accounting and how each method would produce different profit or loss for any given period. Explain why its preferred to use accrual-based accounting method, especially for mid and large size organisations.
FASB suggest that revenues are considered to be earned: a. at the point of sale b. throughout the earnings process c. when the company is entitled to its benefits d. when cash is received
Can a company reply on net income as a valid measure of cash needed to pay fixed charges? Explain you answer