Consider each of the following independent situations. For each company, provide

Question

Consider each of the following independent situations. For each company, provide a brief discussion Interpreting these financial facts. For example, you might discuss the company's financial health or its a pparent growth The retained earnings statement of Lee Corporation shows oividends of $68,000, while net income for the year was $75,000 provided by financing activities was $130,000. Y operating aviDes Was $10,000, cash used in investing activities was $110,000, and cash Show Work is REQUIRED for this question: Open Show work 8ee 5 6 7 8 wE Ul

Explanation / Answer

Answer

---Company’s Net Income is $ 75,000 while it pays Dividend of $ 68,000

---This shows that it distributes around 91% of its earnings to its stockholders.

---This shows that company is in healthy states and that the stockholders will be getting massive return on their investment.

---This also reflects the fact that the company is not accumulating its earned capital, and rather prefer distributing it to shareholder’s.

---It can be summed up as a proof of company’s sound financial health.

---This states that the Cash is Increased by $ 30,000 [ 10000 – 110000 + 130000] during th year.

---Increase is Cash is More than Cash from Operating activities.

---Company might be engaged in large investing activities, acquiring assets.

---Company has also received funds from various debt and equity sources.

---Earnings from Operation seems low. Investments are high. This can be due to the fact the company is new and recently established.

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