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Calculate the accrual ratio using cash flow statement

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The following table is partially extracted from the cash flows statement of People Infrastructure Ltd (PPE), 2020.

                                                                                           30 June 2020 $                  30 June 2019 $

Net cash provided by operating activities                       27,128,847                       10,856,458

Net cash (used in)/provided by investing activities         (13,451,546)                       (30,390,750)

Assume the net operating assets are $124,561,071, $105,191,583 and $90,533,677 for year 2020, 2019, and 2018 respectively. And Net income is $16,396,195 and $9,693,783 for 2020 and 2019. Answer the following questions:

Problem 1: calculate the accrual ratio for 2020 using cash flow statement approach

Problem 2: calculate the accrual ratio for 2020 and 2019 using balance sheet approach

Problem 3: based on what you calculate in previous question using balance sheet-based accruals, answer what happened to the quality of earnings from 2019 to 2020

Reference no: EM132918593

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