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les On the other hand, Company B sells Buko Juice in Brgy. Cabacungan area for 5 years. Company B is consistently earning profits and has a positive cash flow. When asked how CompanyBseesitself after 5more years, CompanyBan

les On the other hand, Company B sells Buko Juice in Brgy. Cabacungan area for 5 years. Company B is consistently earning profits and has a positive cash flow. When asked how CompanyBseesitself after 5more years, CompanyBan

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 3PB: The income statement comparison for Rush Delivery Company shows the income statement for the current...
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Company A is in the business of selling Halo-halo in the Brgy.
Roblesarea for 5 years. Company A is consistently earning
profits and has a positive cash flow. When asked how
CompanyAseesitself after 5more years, CompanyAanswered
thatitwould continue to sellHalo-halo inBrgy.Robles

On the other hand, Company B sells Buko Juice in Brgy.
Cabacungan area for 5 years. Company B is consistently
earning profits and has a positive cash flow. When asked how
CompanyBseesitself after 5more years, CompanyBanswered
that it has generated enough cash to expand its business to the
La Granja area to take advantage of the growing demand for
Buko Juice in LaGranja.

Which ofthe two company’s would you investin?

 

Suppose the following Income Statements and Cash Flow Statements of companies A, B and C were presented to you. Which do you think is a more attractive company? Company A Income Statement P 100,000 50,000 P Cash Flows Collection from Customers Payment of Expenses Sales Less: Costs 50,000 Profits 50,000 Net Cash Flow (P 50,000) Company B Income Statement Cash Flows P 100,000 150,000 (P 50,000) Net Cash Flow P 100,000 50,000 P 50,000 Sales Collection from Customers Less: Costs Payment of Expenses Profits Company C Income Statement Cash Flows P 100,000 70,000 P 100,000 70,000 P 30,000 Sales Collection from Customers Less: Costs Payment of Expenses Profits 30,000 Net Cash Flow
Transcribed Image Text:Suppose the following Income Statements and Cash Flow Statements of companies A, B and C were presented to you. Which do you think is a more attractive company? Company A Income Statement P 100,000 50,000 P Cash Flows Collection from Customers Payment of Expenses Sales Less: Costs 50,000 Profits 50,000 Net Cash Flow (P 50,000) Company B Income Statement Cash Flows P 100,000 150,000 (P 50,000) Net Cash Flow P 100,000 50,000 P 50,000 Sales Collection from Customers Less: Costs Payment of Expenses Profits Company C Income Statement Cash Flows P 100,000 70,000 P 100,000 70,000 P 30,000 Sales Collection from Customers Less: Costs Payment of Expenses Profits 30,000 Net Cash Flow
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