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The Following Information Was Reported from the Statement of Cash

Question 127

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The following information was reported from the statement of cash flows for The W D Company for the years 2015 through 2017 in millions of dollars:  20X7 20X6 20X5  Net earnings $1,300$1,850$1,966 Cash provided by operations $5,599$5,115$5,099 Cash used by investments $(5,310)$(5,665)$(3,936) Cash provided/used by financing $9$360$(1,124)\begin{array} { | l | r | r | r | } \hline & \text { 20X7 } &2 0 X 6 & \text { 20X5 } \\\hline \text { Net earnings } & \$ 1,300 & \$ 1,850 & \$ 1,966 \\\hline \text { Cash provided by operations } & \$ 5,599 & \$ 5,115 & \$ 5,099 \\\hline \text { Cash used by investments } & \$ ( 5,310 ) & \$ ( 5,665 ) & \$ ( 3,936 ) \\\hline \text { Cash provided/used by financing } & \$ 9 & \$ 360 & \$ ( 1,124 ) \\\hline\end{array}
A. Calculate the quality of earnings ratio for the years 20X5 through 20X7.
B. Interpret the quality of earnings ratio for The W D Company for the three-year period.

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(A) 20X7: 4.30, 20X6: 2.76, 20X5: 2.59. ...

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