Income statement and its lack of importance

Assignment Help Financial Accounting
Reference no: EM13183390

Your friend comments, "I just ignore the income statement when I'm making an investment decision. All I care about is the cash, so that the company can pay me dividends. The balance sheet tells me about the cash the company's got; the cash flow statement tells me about its changes in cash. Who cares about the income statement? It's just a bunch of inaccurate stuff loaded with estimates." Do you agree with your friend's remarks about the income statement and its lack of importance? Explain why or why not.

Reference no: EM13183390

Questions Cloud

Compute the firms predetermined overhead rate : Why is calculating the predetermined overhead rate so important and compute the firm's predetermined overhead rate.
Compute the amount of energy : Calculate the amount of energy (in Kj) necessary to convert 317g of liquid water from 0*c to water vapour at 172*c. The molar heat of vaporization of water is 40.79kj/mol.
State calcium carbonate from potassium carbonate : Write the balanced reaction equation for the precipitation of calcium carbonate from potassium carbonate and calcium chloride.
What is fixed cost as defined for activity-based-costing : What steps are involved in planning the costing framework, how much time should be expended on account review and what is fixed cost as defined for Activity-Based-Costing("ABC"
Income statement and its lack of importance : Who cares about the income statement? It's just a bunch of inaccurate stuff loaded with estimates." Do you agree with your friend's remarks about the income statement and its lack of importance? Explain why or why not.
What is the multiplier for a lump-sum tax : What is the equilibrium level of income?  Is there an inflationary or a deflationary gap? Why? What is its magnitude? What is the value of the government expenditures multiplier?  What is the value of G that would move the economy to full employment ..
Determine profit-maximizing price and level of production : You are the manager of a monopolistically competitive firm, and your demand and cost functions are given by Q = 36 - 4P and C(Q) = 124 - 16Q + Q2 a. Find the inverse demand function for your firm's product. b. Determine the profit-maximizing price ..
What is the individuals optimal consumption : Consider an economy composed of identical individuals who live for two periods. These individuals have preferences over consumption in period 1 and 2 given by U = (c1)0.5 × (c2)0.5. They receive an income of 100 in period 1 (young) and 20 in perio..
Reforms to enhance audit quality : What each of the above actually refers to and what it means and what is your view, giving a rational explanation to your view (you may use other sources to support your view, properly referencing).

Reviews

Write a Review

Financial Accounting Questions & Answers

  What is firm return on owners equity

Its owners' equity totaled $2,500,000. Based on these amounts, what is firm's return on owners' equity?

  Purchased inventory on account

Purchased inventory on account and Sold inventory below its cost at a loss

  Method of amortization of bond discount

If the corporation uses the straight -line method of amortization of bond discount,the amount of bond intrest expense to be recognized on July 1,2010 is ?

  Case study - think before you spend

The ramin, which is also used for furniture and window blinds, is a rare and endangered tree listed under the Convention on International Trade in Endangered Species, but continues to be logged illegally at an alarming rate.

  Evaluate the investing cash flows

Evaluate the investing cash flows - consider there were no other non-current assets sold during the period or revalued.

  Prepare an income statement for the year ended

Prepare an income statement for the year ended December 31, 2007, which includes amounts for gross profit, income before income taxes, and net income.

  Describe why an equal percentage increase

Describe why an equal percentage increase (or decrease) in sales for each firm would have such differing effects on operating income. Evaluate the ratio of contribution margin to operating income for each firm in 2008.  (Hint:  Divide contribution..

  Make a production budget for february

Make a forecast of the units and cost of raw material that will be required for February, March, and April. The expected cost per pound of raw material is expected to be $2 in February, $2.30 in March, and $2.40 in April

  Journalizing adjusting entries

Journalizing adjusting entries and Journalize the adjusting entry needed at December 31 for each of the following independent situations.

  Dividends received by the preferred stockholders in 2013

What are the dividends received by the preferred stockholders in 2013 - Stock dividends and stock splits have the following effects on retained earnings

  Defective units and reworking of units

Defective units, reworking of units, prevention cost , appraisal cost given difference of profit earned to find number of defective units. Variance Corporation is a manufacturer of a versatile statistical calculator.

  How much is dollar value of ending inventory using costing

Lenat Company produced 50,000 units during the year. Variable costs per unit and fixed production costs have remained constant the entire year. There were no beginning inventories. How much is dollar value of ending inventory using full costing?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd