Response to the following problem:
Key figures for Research In Motion and Apple follow.
| |
|
Research in Motion |
|
|
Apple |
|
| ($ millions) |
Current Year
|
I Year Prior |
2 Years Prior
|
Current Year |
I Year Prior
|
2 Years Prior
|
|
Operating cash flows .
|
$3,035
|
$1,452
|
$1,577
|
$10,159
|
$ 9,596
|
$ 5,470
|
|
Total assets ......................
|
10,204
|
8,101
|
5,511
|
47,501
|
36,171
|
25,347
|
Required:
1. Compute the recent two years' cash flow on total assets ratios for Research In Motion and Apple.
2. What does the cash flow on total assets ratio measure?
3. Which company has the highest cash flow on total assets ratio for the periods shown?
4. Does the cash flow on total assets ratio reflect on the quality of earnings? Explain.