1. Since cash generally does not yield a return, why does a company hold cash

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1- Why is liquidity important in financial statement analysis? Explain its importance from the viewpoint of different users. 2- Since cash generally does not yield a return, why does a company hold cash? 3- The income statement of Kimberly Corporation for the year ended December 31, Year 1, is re- produced below: KIMBERLY CORPORATION Consolidated Income Statement ($ thousands) For Year Ended December 31, Year 1 $14,000 300 14,300 Sales. Undistributed income of less than 50%-owned affiliates......... Total revenue. Cost of goods sold. $6,000 Selling and administrative expenses. 2,000 Depreciation... 600 Rental expense. 500 Share of minority interest in consolidated income. 200 Interest expense. 400 Income before taxes (9,700) 4,600 Income taxes Current Deferred 900 400 (1,300) $ 3,300 Net income Less dividends. Common stock. Preferred stock. Earnings retained for the year. 300 400 (700) $ 2,600