Analyzing the quality of firm earnings)Kabutell, Inc. had net income of $650,000, cash flow from financing activities of $80,000, depreciation expenses of $60,000, and cash flow from operating activities of $550,000.

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)	2011	2012	2013
Cash Flow from Operations	$479	$404	$470
Capital Expenditures (CAPEX)	$458	$448	$454

Calculate the average capital acquisitions ratio over the three-year period. How would you interpret these results?