Question

Research in Motion Limited (RIM) is not well known, but it produces a well-known product: the Blackberry mobile phone. Information for 2009 and 2008 from the company’s annual report appears below.15 (All numbers are in thousands.) Three students who were looking at RIM’s annual report were overheard making the following comments:
Student A: What a great year RIM had in 2009! The company earned income of $2,590,185 because its total assets increased from $5,511,187 to $8,101,372.
Student B: But the company didn’t do that well because the change in total assets isn’t the same as net income! The company had a net loss of $348,852 because its cash decreased from $1,184,398 to $835,546.
Student C: I see that retained earnings went from $1,653,094 to $3,545,710.
Don’t you have to take that into consideration when analyzing the company’s performance?
1. Comment on the interpretations of Students A and B and then answer Student C’s questions.
2. Estimate RIM’s net income for the year ended February 28, 2009. (Note: RIM did not pay any cashdividends.)


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  • CreatedSeptember 10, 2014
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