FIN5200 Statement Isnt a Cash Flow Good Representation

FIN 5200 AU Statement Isnt a Cash Flow Good Representation Questions

Chapter 1&2. 

Textbook:

Title: Corporate Finance 

QUESTIONS 

#1 Define liquidity and explain what a firm would need to do to ensure all of the current assets displayed on its balance sheet are liquid. 

#2 Explain why the income statement is not a good representation of cash flow. 

#3 If the corporate form of business organization has so many advantages over the sole proprietorship, why is it so common for small businesses to initially be formed as sole proprietorships? 

#4 Byron T, Inc., has sales of $40,500, costs of $23,500, depreciation expense of $1,600, and interest expense of $1,200.

If the tax rate is 35 percent, what is the operating cash flow, or OCF? (Do not round intermediate calculations.)

 Operating cash flow