Companies a and B Both Report Net Income Growing at 12

question 99

Multiple Choice

Companies A and B both report net income growing at 12% per year.Company A has a receivables turnover ratio of 5.6,which is smaller than its previous year.Company B has a receivables turnover ratio of 11.3,which is higher than its previous year.All other things equal:

• A)Company A appears to be better managed.
• B)Company A will have the lower days-to-collect measure.
• C)Company B appears to be better managed.
• D)Company B's days-to-collect measure is rising.

Compute free cash flow.

Interpret the effects of transactions involving property, plant, and equipment (PP&E) on cash flows.

Analyze the effects of noncash investing and financing activities.

Appreciate the significance of the statement of cash flows in financial reporting and analysis.

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