Which of the Following Companies Would Be Considered to Have

question 39

Multiple Choice

Which of the following companies would be considered to have quality earnings?

• A) The cash flow per share is not significantly larger than earnings per share.
• B) The earnings per share show a consistent growth rate.
• C) The company lists no unusual or extraordinary items in its income statement.
• D) Earnings per share vary by no more than 10 percent per quarter.
• E) Earnings per share are larger than the cash flow per share.

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Definitions:

Operating Expenditure

The costs associated with the day-to-day operations of a business, including salaries, rent, and utilities.

Financial Position

The snapshot of a company's assets, liabilities, and equity at a specific point in time, providing insight into its economic resources and obligations.

Operating Condition

The current state and functioning status of a company's operational processes and resources.

Insurance

A contractual arrangement where an insurer agrees to compensate the insured for specified loss, damage, illness, or death in return for payment of a premium.