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Discuss the direct and indirect presentation of cash flows

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1. The text discusses how irregular items such as discontinued operations and extraordinary items are presented on the income statement and how they affect sustainable income. Explain the definition of an 'extraordinary item' and give an example.

2. Which is known as the 'common size analysis- horizontal analysis or vertical analysis? What is the significance of this name?

3. Identify the three categories of ratios used to analyze financial information and discuss their usefulness.

4. Compare and contrast the direct and indirect presentation of cash flows? Which would you prefer to use?

Reference no: EM131791888

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