The following information is presented from the financial statement of four companies that operate in the same industry, use similar processes, and are comparable in size. Based on this limited information, which company likely has the weakest quality of earnings?
A) Company 1
B) Company 2
C) Company 3
D) Company 4 Solution D, accounts receivable changes are not in line with changes in sales, which are declining from 2009 to 2010.

Question

The following information is presented from the financial statement of four companies that operate in the same industry, use similar processes, and are comparable in size.  Based on this limited information, which company likely has the weakest quality of earnings?
A) Company 1 
B) Company 2 
C) Company 3 
D) Company 4 Solution D, accounts receivable changes are not in line with changes in sales, which are declining from 2009 to 2010.

Quizplus · Accepted Answer

The Answer of The following information is presented from the financial statement of four companies that operate in the same industry, use similar processes, and are comparable in size.  Based on this limited information, which company likely has the weakest quality of earnings?
A) Company 1 
B) Company 2 
C) Company 3 
D) Company 4 Solution D, accounts receivable changes are not in line with changes in sales, which are declining from 2009 to 2010.

The Following Information Is Presented from the Financial Statement of Four