Which of the following statements is incorrect? Net income is distributed as either dividends or retained earnings. Fixed assets are long-lived property that generate revenue for a firm. Depreciation is a cash flow used to calculate cash flow from assets. A common-size income statement compares historical sales and costs. Financial leverage ratios measure the level of indebtedness and long-term solvency.
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Statement 1: Net income is distributed as either dividends or retained earnings. This is a correct statement. Statement 2: Fixed assets are long-lived property that generate revenue for a firm. This is a correct statement. Statement 3: Depreciation is a cash flow Show more…
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Which of the following statements is FALSE? A. Liquidity measures the speed and ease with which assets can be converted to cash without significant loss of value, and 'fortress' balance sheets are especially liquid. B. Even though depreciation is not a cash expense, it affects taxes, and corporations prefer to depreciate assets using accelerated over straight line methods for tax purposes. C. The marginal tax rate is the tax rate payable on the next dollar earned and is always higher than the average tax rate. D. Operating Cash Flow is generated from utilizing existing assets after deducting interest expense.
Prabhat T.
James K.
Income statements illustrate what revenues the firm collects, the expenses required to support revenues, and the firm's profitability over a specified period of time. While balance sheets are a "snapshot" of the firm's status on a specific date, income statements reflect performance over a period of time. Publicly held companies generate income statements every quarter (three months) and for their annual report. In this example, the firm pays half of its earnings as dividends to its stockholders and retains the other half. This is done for simplicity here, but real firms weigh a multitude of factors in setting their dividends. This issue will be covered in your finance course. The gross margin for this fictional company is: 18.2% 9.2% 33.3% 14.7% 60.3% If the firm has 200,000 common shares outstanding, its earnings per share (EPS) is while its dividends per share (DPS) is With its earnings, a firm has a decision to make about whether to pay common dividends or On the income statement, interest expense is preferred dividends are and common dividends are Wages are considered a(n) A company usually expenses when it incurs them, because the future benefits that this spending is expected to bring are very uncertain and difficult to time.
Akash M.
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