In reviewing the financial statements of NanoTech Co., you discover that net income increased, while operating cash
Question:
In reviewing the financial statements of NanoTech Co., you discover that net income increased, while operating cash flows decreased for the most recent two consecutive years.
Required
a. Explain how net income could increase for NanoTech while its operating cash flows decrease. Your answer should include three illustrative examples.
b. Describe how operating cash flows can serve as one indicator of earnings quality.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Step by Step Answer:
a The Net income of NanoTech is increase and the Operating cash flow decrease some time it may happe...View the full answer
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Related Book For 
Financial Statement Analysis
ISBN: 978-0078110962
11th edition
Authors: K. R. Subramanyam, John Wild
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