The balance sheet of Tech Track reports total assets of $400,000 and $500,000 at the beginning and end of the year,respectively.Sales revenues are $1.1 million ($0.8 million in the previous year),net income is $40,000,and net cash flows from operating activities are $50,000.How does Tech Track's cash flow to sales ratio compare to the industry average of 5%?
A)Better.
B)Worse.
C)Same as.

Question

Quizplus · Accepted Answer

Tech Track's cash flow to sales ratio is $50,000 / $1,100,000 = 4.55%, which is worse than the industry average of 5%.

The Balance Sheet of Tech Track Reports Total Assets of $400,000