Author Question: A security analyst obtained the following information from Austin Products financial statements: ... (Read 12 times)

C0DxHalo · **on:** Aug 7, 2023

A security analyst obtained the following information from Austin Products’ financial statements:

– Retained earnings at the end of 2019 were $900,000, but retained earnings at the end of 2020 had declined to $510,000
– The company does not pay dividends.
– The company’s depreciation expense is its only non-cash expense; it has no amortization
charges.
– The company has no non-cash revenues.
– The company’s net cash flow for 2020 was $180,000.

On the basis of this information, which of the following statements is correct?

◦

The company’sdepreciation expense in 2020 was less than $180,000.

◦

The company had negative net income in 2020.

◦

The company had positive net income in 2020, and its income was greater than its 2019 income.

◦

The company’s cash on the balance sheet at the end of 2019 must be higher than the cash it had at the end of 2020.

ealonif · **Reply #1 on:** Aug 7, 2023

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