A company has net income of $43,560 with a net cash flow from operating activities of $91,476 and a net increase in cash of $84,942. The company paid $33,524 for income taxes and $25,000 for interest during the year. The company's quality of income ratio is:
A) 2.1.
B) 1.1.
C) 1.95.
D) 0.48.

Question

Quizplus · Accepted Answer

The quality of income ratio is calculated as net cash flow from operating activities divided by net income. Here, it is $91,476 / $43,560 = 2.1.

A Company Has Net Income of $43,560 with a Net