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Financial Reporting and Analysis
1. If the cash flow earnings index (cash flow from operations divided by net income) is consistent, analysts are most likely to conclude that the quality of the company’s earnings is in question:
A. equal to 1.0.
B. less than 1.0.
C. greater than 1.0.
2. A company issues bonds with a nominal value of £5 million. For this issue, the company will record an amount:
A. cash inflow from investing activities.
B. cash outflow from financing activities.
C. cash inflow from financing activities.
3. Which of the following statements is least accurate?
A. Treasury stock has no voting rights and is eligible to receive dividends.
B. Minority interest on the balance sheet represents the percentage of ownership of a subsidiary not held by the parent company.
C. A classified balance sheet organizes various assets and liabilities into subcategories.