In 2012,The W D Company reported profit of $1.3 billion and cash flow from operations of $5.6 billion.In 2011,it profit was $1.9 billion and cash flow from operations was $5.1 billion.What were their quality of income ratios for 2012 and 2011 respectively?
A).23 and .37
B).91 and 1.46
C)1.10 and .68
D)4.31 and 2.68

Question

Quizplus · Accepted Answer

The quality of income ratio is calculated by dividing cash flow from operations by net income. For 2012, it is $5.6 billion / $1.3 billion = 4.31. For 2011, it is $5.1 billion / $1.9 billion = 2.68.

In 2012,The W D Company Reported Profit of $1