Question

Why should you reformulate the income statement and balance sheet by separating the income/expenses and the assets/liabilities associated with operating and financing?

Group of answer choices

a.This allows a focus on the company’s ability to meet its debt and avoid bankruptcy

b.This allows a focus on the company’s ability to generate future cash flows and dividend payments

c.This separation permits a focus on the company's operations in our forecasting and valuation

d.This separation permits a focus on how well a company is managing its investments for

Answer 1

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Why should you reformulate the income statement and balance sheet by separating the income/expenses and the assets/liabilities associated with operating and financing

Correct answer is option c and d.

c. This separation permits a focus on the company's operations in our forecasting and valuation.

d. This separation permits a focus on how well a company is managing its investments for.