1. Corp X follows a policy of expensing all asset purchases while Corp B follows a policy of capitalizing- i.e balance Sheet transactions-of all asset purchases.

Please compare the effects of the following ratios between the two companies with an explanation. Assume-all other accounts remain unchanged.

1-Asset turnover

2- Debt ratio

3- profit ratio

3-return on asset

4- Return on equity

2. What are the 2 methods for cash Flow Presentation? Which do you prefer? Give 1 reason