Lucas Company has provided the following information:
Cash flow from operating activities,$360,000;
Net income,$306,000;
Interest expense,$30,000;
Interest cash payments,$20,000;
Income tax payments,$240,000;
Income tax expense,$246,000.
What was Lucas' quality of income ratio?
A)0.85
B)0.74
C)1.18
D)0.93

Question

Lucas Company has provided the following information:
 Cash flow from operating activities,$360,000;
 Net income,$306,000;
 Interest expense,$30,000;
 Interest cash payments,$20,000;
 Income tax payments,$240,000;
Income tax expense,$246,000.
What was Lucas' quality of income ratio?
A)0.85
B)0.74
C)1.18
D)0.93

Quizplus · Accepted Answer

Quality of income ratio (1.18) = Cash Flow from operating activities ($360,000) F1F1F1S1?F1F1F10 Net income ($306,000)

Lucas Company Has Provided the Following Information