Computing Quality of Income Ratios
Consider the following information for two high-tech companies:
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Oxford, LTD
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Kendall, LTD
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(Dollars in thousands)
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Cash provided by operating activities
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$5,600
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$ 7,419
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Net income
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$ 684
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$12,916
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Required
a. Compute the quality of income ratio for each firm.
b. What inferences can be drawn from these ratios?