A Company Reported Average Total Assets of $501,000 in Year

question 62

Essay

A company reported average total assets of $501,000 in Year 1 and $611,000 in Year 2.Its net operating cash flow in Year 1 was $41,500 and $55,250 in Year 2.Calculate its cash flow on total assets ratio for both years.Comment on the results.

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Definitions:

Principle Of Continuity

A guideline in psychology stating that individuals prefer perceptions of connected and continuous figures to disconnected and disjointed ones.

Perceptual Tendency

The inclination to perceive or interpret information in a particular way based on prior experiences and expectations.

Linear Perspective

A technique in drawing and painting where parallel lines seem to converge as they recede towards a single point on the horizon, creating an illusion of depth.

Depth Cue

A signal in our environment, either binocular or monocular, that provides information about distance or depth.