a. What are some examples of current assets?

b. What are some examples of fixed assets?

c. What are some examples of current liabilities?

d. Which accounts in Table 19.1 show changes between the 2535 and 2536 balance sheets?

e. What is cost of goods sold (COGS)?

f. What is the difference between gross profit and operating income?

g. What is the difference between net income and pretax income?

h. What is meant by retained earnings?

i. What is the difference between net income and operating cash flow?

j. What are some noncash items used to calculate operating cash flow?

k. What is the difference between an investment cash flow and a financing cash flow?

l. What is meant by net increase in cash?

m. Can you explain why a cash item like interest expense does not appear on the cash flow statement?

n. What is the difference between gross margin and operating margin?

o. What is the difference between return on assets and return on equity?

p. What is the difference between earnings per share and cash flow per share?

q. How is cash flow per share calculated?

Table 19.1

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Borg Corporation Balance Sheets, 2536 and 2535 Year 2536 Current assets Cash Accounts receivable Prepaid expenses Materials and supplies Inventory Total current assets Fixed assets Plant facilities Production equipment Administrative facilities Distribution facilities Accumulated depreciation Total fixed assets Goodwill Other assets Total assets Current liabilities Short-term debt Accounts payable Total current liabilities Long-term debt Other liabilities Total liabilities Shareholder equity Paid-in capital Retained earnings Total shareholder equity Total liabilities and equity Shares outstanding Year-end stock price $ 2,000 6,200 1,500 1,300 9,000 $20,000 $35,000 20,000 15,000 10,000 (20,000) $60,000 $ 5,000 3,000 $88,000 $10,000 5,000 $15,000 $30,000 3,000 $48,000 $10,000 30,000 $40,000 $88,000 2,000 $ 40 Year 2535 $ 1,480 6,200 1,500 1,300 9,000 $19,480 $35,000 20,000 15,000 (17,000) $53,000 3,000 $75,480 $10,000 5,000 $15,000 $20,000 3,000 $38,000 $10,000 27,480 $37,480 $75,480 2,000 $ 36