FIN515 Midterm exams

(TCO G) A security analyst obtained the following information from Prestopino Products’ financial statements.

• Retained earnings at the end of 2009 were $700,000, but retained earnings at the end of 2010 had declined to $320,000.
• The company does not pay dividends.
• The company’s depreciation expense is its only noncash expense; it has no amortization charges.
• The company has no noncash revenues.
• The company’s net cash flow (NCF) for 2010 was $150,000.
                                                                                                
On the basis of this information, which of the following statements is correct?
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