$($Analyzing the quality of firm earnings$)$Kabutell$,$ Inc. had net income of

$$650,000,$

cash flow from financing activities of

$$60,000,$

depreciation expenses of

$$40,000,$

and cash flow from operating activities of

$$650,000.$

a$.$Calculate the quality of earnings ratio. What does this ratio tell you?

b$.$Kabutell$,$ Inc. reported the following in its annual reports for

$20112013$:

$($$ million$)$

$201120122013$

$$Cash Flow from Operations $$477$

$$404$

$$471$

$$Capital Expenditures $($CAPEX$)$

$$461$

$$449$

$$456$