Cash Flow Analysis Below are data extracted from the financial statements for Mushu Company.

Required:
1. Compute the following for 2008 and 2009:

a. Return on sales

b. Return on equity

c. Cash flow-to-net income ratio

d. Cash flow adequacy ratio 2. In which year did Mushu Company perform better: 2008 or 2009? Explain your answer.

Transcribed Image Text:

Total assets Stockholders' equity Sales Mushu Company Selected Financial Statement Data For the Years Ended December 31, 2009 and 2008 (in millions of dollars) Net income Cash from operations Cash paid for capital expenditures Cash paid for acquisitions Cash paid for interest Cash paid for income taxes 2009 2008 $112,000 $103,000 24,000 22,000 96,000 78,000 8,100 5,400 10,300 14,800 7,500 6,400 3,400 1,100 2,100 1,200 3,400 3,200