Kabutell, Inc. had net income of $750,000, cash flow from financing activities of $50,000, depreciation expenses of $50,000, and cash flow from operating activities of $575,000 .

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

b.Kabutell, Inc. reported the following in its annual reports for 2011-2013:

Cash Flow from Operations (in milions):

2011 - $478

2012 - $403

2013 - $470

Capital Expenditures (CAPEX):

2011 - $459

2012 - $447

2013 - $456

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