Would you expect the operating profit margin to be higher or lower than the gross profit margin? What's a good operating profit margin?

You've been trying to explain cash flow statements to your arts major flatware. He thinks a company that makes a large profit will obviously have a large increase in cash. Complete the following table as a means of explaining to your flatmate how this will not always be the case.Effect on profitEffect on cashDescription of transaction1IncreaseNo effect2DecreaseNo effect3No effectIncrease4No effectDecrease

Which accounting standard covers financial ratio calculations? Discuss.