Answer:
Free cash flow (FCF) is, essentially, the cash flow that is available for interest and dividends after the company has made the investments in current and fixed assets that are necessary to sustain ongoing operations. (A)
Explanation:
Option A- This statement is true.
Option B- This is false. After-tax operating Income is calculated as Operating profit less interest less Depreciation and less tax
Option C-This is false. They will have the same operating incomes. Operating income is calculated as Sales less operating cost.
Option D- False.
Option E- False.
<span>Buying a bond does not constitute ownership in a company. In the event that Touchtech, or any firm that issues a bond, runs into financial difficulty, bondholders are the first to be paid. Sean, as a bondholder, would be among the first paid.</span>
Answer: Option (C) is correct.
Explanation:
Given that,
Old market price of stock = $15
New market price of stock = $18
Here, we assume that EPS be $5.
So,
Price-earning ratio at old price = 
= 
= 3
Price-earning ratio at New price =
= 
= 3.6
Hence, price-earnings ratio increases.
Scarcity exists because people's wants for goods and services are greater than the number of products that can be made from available resources
Answer: Cost of Goods sold
Explanation:
Common size analysis refers to making all entries in the income statement, a percentage of sales for that year.
Current Year Prior Year
Sales 100% 100%
Cost of Goods sold 75.7% 46.5%
Gross Profit 24.3% 53.5%
Operating expenses 17.3% 35%
Net Income 7.0% 18.5%
<em>Looking at the percentages above, one can see that the COGS increased the most from the previous year by going from 46.5% to 75.7% representing an increase of 29.2%.</em>
<em>This had the most impact on Net income as it substantially reduced Gross profit. </em>
