1. Why has the share price decreased despite the fact that net income has increased?

2. How liquid would you say this company is? Calculate the absolute liquidity of the company. How does it compare to the liquidity position of the previous year?

3. How does the market value of the shares compare to their book value? Is the book or book value accurately reflecting the true condition of the business?

4. The Board of Directors is unclear as to why the cash balance has declined sharply despite increased sales and gross profit margin. What should Jay say to the Board?

5. Measure the company's free cash flow. Which indicates?

6. Calculate the net working capital of the company for each of the two years. What can you conclude about the company's net working capital?

7. Should shareholders be concerned about the decrease in cash flow or should they be happy that earnings per share have increased?

Answer rating: 100% (QA)

1 The decrease in share price may be due to concerns about the companys future prospects despite the ... View the full answer