A company's quarterly income statements show that in the last three quarters both sales revenue and net income have been falling.Which of the following conclusions drawn by users are valid,given this information?

Question

Quizplus · Accepted Answer

The only valid conclusion that can be drawn from the given information is that the owners may conclude that the company will be less likely to distribute dividends. This is because when net income is falling, the company may find it difficult to maintain or increase dividend payments to its shareholders. The other options are not valid conclusions as they make assumptions that are not necessarily supported by the information provided. Creditors may be more concerned about the company's ability to repay the loan if its income is falling, investors may not find the company attractive if its financial performance is declining, and customers are obligated to pay their debts to the company regardless of its financial performance.

A Company's Quarterly Income Statements Show That in the Last