When a company reports net income,financial statement users see this as a sign that
A)the company is viable.
B)the company has the ability to sustain itself.
C)the company has the ability to declare dividends.
D)all of the above.

Question

Quizplus · Accepted Answer

When a company reports net income, it means that the company has generated enough revenue to cover its expenses and make a profit. Financial statement users see this as a sign that the company is viable and has the ability to sustain itself. Additionally, if the company has positive retained earnings and a strong cash position, it may have the ability to declare dividends to shareholders. Therefore, all of the above options are correct.

When a Company Reports Net Income,financial Statement Users See This