ezto mheducation.com Final Exam A recent annual report for BubbliCo contained th

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ezto mheducation.com Final Exam A recent annual report for BubbliCo contained the following information for the period (dollars in million Net Income Increase in accounts recelvable Increase in Inventory Increase in prepaid expense Increase in accounts peyable Decrease in taxes payable Increase in other current liabilities Cash dividends paid Treasury stock purchased $ 548 1546 549 360 86 734 197 741 2,541 4,731 9. Required: 1. Compute cash flows from operating activities for BubbliCo using the indirect method. (Enter your answer in decimals, not in percentages, rounded negative amounts.) BUBBLICo Statement of Cash Flows (Partial) Cash flows from operating activities Adjustments to reconcile net income to cash flow from operating activities

Explanation / Answer

1.

2. Quality of income ratio = Cash flow from operating activities / Net income = $6977 / $5148 = 1.36

BUBBLICO Statement of Cash Flows (Partial) ($ in millions) Cash flows from operating activities: Net income 5148 Adjustments to reconcile net income to cash flow from operating activities: Depreciation and amortization 1546 Increase in accounts receivable -549 Increase in inventory -360 Increase in prepaid expense -86 Increase in accounts payable 734 Decrease in taxes payable -197 Increase in other current liabilities 741 Net cash provided by operating activities 6977

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