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Acct 1
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1. a) Cash flow statement provides solvency and liquidity information of a firm, additional data for evaluating changes in liabilities, equity, and assets, and timing, probability and amount of future cash flows. The cash flow statement can convey information through the use of annual reports that many firms publish at the end of trading periods. b) The indirect method uses simple reports that are mostly in universal use. The direct method involves the use of gross cash payments and receipts. The reports can either be in the form of investing activities or operating activities. The Direct method is the useful way its reports contain cash receipts and payments, and taxes unlike indirect which has straightforward reporting.

2. a) ROA= Net Income/ Total Assets
= Total assets = total assets at the end of the year – total assets at the beginning of the year
19,345- 18,596 = 749 = 754 000 000/749 000 000
= 1.0067

b) ROA = Profit Margin X Asset turnover
Profit margin (PM) = Net profit/ Total revenue
Asset turnover = Total revenue/ Average total assets
Total assets = 749 000 000
Average total assets= 749 000 000/2
= 374 500 000
Total revenue= 17 699 000 000
Asset turnover = 17 699 000 000/374 500 000
AT= 47.2603
1.0067= PM X 47.2603 1.0067/47.2603 = PM
PM= 0.0213
Profit margin measures profitability relative to soles revenue. Asset Turnover measures the ability of management to utilize net assets of a firm to generate sales revenue. 3. Carrying amount means the value of stockholders' equity , according to financial statements or books of a firm. The book value gets its information from calculations of the balance sheet. Market value, on the other hand, means the value of stockholders' according to the stock exchange. When you multiply outstanding shares of