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You are a Credit analyst for ABC Bank, and the bank is considering a loan in the amount of $1 million to Humpty Dumpty Co. (HDC) to add to its egg production business. You are looking at HDC's financials and note that the company generated $50 million in revenue in its last fiscal year. The company's Cost of Goods Sold was $47 million. HDC often does not get paid right away for its eggs, and for its latest fiscal year received payment for 85% of its eggs. A) What is the accounting profit HDC generated for its fiscal year? B) Did HDC have a successful year from an accounting perspective? Yes No C) What is the financial cash flow HDC generated for its fiscal year? D) Did HDC have a successful year from a financial perspective? Yes No E) If the current earnings/cash flow pattern continues, what do you think will happen to HDC?_ You are a Credit analyst for ABC Bank, and the bank is considering a loan in the amount of $1 million to Humpty Dumpty Co. (HDC) to add to its egg production business. You are looking at HDC's financials and note that the company generated $50 million in revenue in its last fiscal year. The company's Cost of Goods Sold was $47 million. HDC often does not get paid right away for its eggs, and for its latest fiscal year received payment for 85% of its eggs. A) What is the accounting profit HDC generated for its fiscal year? B) Did HDC have a successful year from an accounting perspective? Yes No C) What is the financial cash flow HDC generated for its fiscal year? D) Did HDC have a successful year from a financial perspective? Yes No E) If the current earnings/cash flow pattern continues, what do you think will happen to HDC?_
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Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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