1. In the income statement, do you think potential investors in your business will be more interested in earnings (net income) or cash flow? Why do you think that?

2. Two common ratios that provide similar information to an enterprise are the Current Ratio and Quick Ratio.

1What basic information do these ratios provide, that is, which category do these ratios fall into?

2Suppose a camping product retailer has a liquidity ratio of 2.7. What does this say about the company in general? Suppose the quick ratio of the enterprise is 0.75:1. What does this mean? Is it possible for an enterprise to have a flow and a quick ratio of these two values? Why is that?