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# 09class4 - Logue Shoe Store Year Three: Assets Acct. Rec....

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Assets Balance Sheet Change Operations Investing Financing Acct. Rec. +102 (102) Inventorie s +7,198 (7,198) Oth. Curr. Assets (3,591) 3,591 Prop., Plant, Equip. +1,651 (1,651) Accum Dep. +7,985 7,985 Other Assets 1 Logue Shoe Store Year Three:

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Liabilities Balance Sheet Change Operations Investin g Financin g Acct. Pay -6,126 (6,126) Notes Pay 0 Curr. Portion Long- term Debt -7,259 (7,259) Other current liabilities +2,559 2,559 Long-term debt -9,536 (9,536) Common Stock 0 A.P.I. Capital 0 Retained Earnings +16,634 16,634 Cash -1,103 17,343 (1,651) (16,795) 2 Logue Shoe Store Year Three:
One additional factor: Sale of assets for a gain or loss. Suppose that the change in the land account is a decrease of 25. Suppose we are told that land was sold at a gain of 15. What is the correct solution to the change in land account using Exhibit 3.12? 3 Change in Acct. Operation s Investing Financing Land -25

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Summary. 1. The quality of earnings ratio equals (cash flow from operations – net income)/total assets. In the past investors have made positive abnormal returns buying stocks with a high quality of earnings ratio. 2. The key equation for the preparation of the statement of cash flows is Cash = Liabilities + Owner’s equity - Noncash assets 4
5 Interpreting Ratios (page 238-239 of the textbook) There are two main ways to interpret ratios. A ratio should be compared with those of other companies in order to know if it is high or low. A ratio should also be compared with the company’s own ratio in

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## This note was uploaded on 04/21/2009 for the course MGMT 126 taught by Professor Miller during the Winter '09 term at UCLA.

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09class4 - Logue Shoe Store Year Three: Assets Acct. Rec....

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