MGT120H5 Study Guide - Final Guide: Inventory Turnover, Net Income, Cash Flow

• School: UTM
• Department: Management
• Course: MGT120H5
• Professor: Catherine Seguin

Document Summary

Solutions to mgt120 winter 2013 final exam: b, a, d 7. Adjustments to reconcile net income to net cash provided by operating activities: The company shows no sign of trouble collecting receivables or selling inventory. There is no large build-up in either accounts receivable or inventory. Also, cash flow from operations is positive, and it exceeds net income. This trend cannot continue for long without hurting the company"s ability to produce revenue: xyz corp. is raising more cash by selling shares than abc corp. is. Corp. more cash to invest in research and development for new products and other innovations to enhance the company"s competitiveness. Abc corp. , on the other hand, is paying off debt. That is not necessarily bad for abc corp, but xyz corp. appears to be a step ahead in terms of financing its operations with owners" equity and investing the cash in income producing assets.