Kabutell, Inc. had net income of $850,000, cash flow from financing activities of $50,000, depreciation expenses of $80,000, and cash flow from operating activities of $650,000.

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

Kabutell, Inc. reported the following in its annual reports for 20112013:

($ million)	2011	2012	2013
Cash Flow from Operations	$480	$404	$468
Capital Expenditures (CAPEX)	$458	$448	$456

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

Part one

What is Kabutell's quality of earnings ratio?: ???% (Round to one decimal place.)

Part two

What does this ratio tell you?(Select the best choice below.)

A. Kabutell's cash flow from operations was 76.5 percent of the firm's reported net income. The firm depends mainly on non-operating source of cash to generate its net income.

B. Kabutell's cash flow from operations was 76.5 percent of the firm's reported net income. The firm depends mainly on operating source of cash to generate its net income.

C. Kabutell's reported net income was 76.5 percent of the firm's cash flow from operations. The firm depends mainly on non-operating source of cash to generate its net income.

D. Kabutell's reported net income was 76.5 percent of the firm's cash flow from operations. The firm depends mainly on operating source of cash to generate its net income.

Part three

What is Kabutell's average capital acquisitions ratio over the three-year period?: ???% (Round to one decimal place.)

Part four, final

How would you interpret these results?(Select the best choice below.)

A. Consequently, for the past three years, Kabutell was on average able to finance 99.3 percent of its new expenditures for plant and equipment out of the firm's sales of fixed assets.

B. Consequently, for the past three years, Kabutell was on average able to finance 99.3 percent of its new expenditures for plant and equipment out of the firm's issuance of debt.

C. Consequently, for the past three years, Kabutell was on average able to finance 99.3 percent of its new expenditures for plant and equipment out of the firm's current-year operations.

D. Consequently, for the past three years, Kabutell was on average able to finance 99.3 percent of its new expenditures for plant and equipment out of the firm's issuance of common stock.