Explore BrainMass

Explore BrainMass

    Good news versus bad news from annual report

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    This is a finance problem. I know that the net income has increased and that would be classified as good news. The problem is as follows:

    Kwik Express specializes in the transportation of medical equipment and laboratory specimens overnight. The company has selected the following information from its most recent annual report to be the subject of an immediate press release.
    1)*The financial statements are being released. (I know this would be classified as good news.)
    2)*Net income this year was $2.2 million. Last year's net income had been $1.8 million. (I also believe this should be classified as good news.)
    3)*The current ratio has changed to 2:1 from last year's 1.5:1.( I'm unsure about this one.)
    4)*The debt/total assets ratio has changed to 4:5 from last year's 3:5.( I'm unsure about this one.)
    5)*The company expanded its truck fleet substantially by purchasing ten new delivery vans.( I believe this would also be good news for the company.)
    6)*The company already had twelve delivery vans. The company is now the largest medical courier in the mid-Atlantic region. (I believe this is good news also.)

    I am supposed to include all of the above statements and tell which information is good news for the company and which is bad news. I'm really not exactly sure which is bad news. Please HELP!

    © BrainMass Inc. brainmass.com March 6, 2023, 3:36 pm ad1c9bdddf
    https://brainmass.com/business/finance/good-news-versus-bad-news-from-annual-report-154906

    Solution Preview

    1)*The financial statements are being released. (I know this would be classified as good news.)

    The release of financial statements on a regular basis and within the stipulated time is a good news as it means that the company is reporting its progress in a timely manner.

    2)*Net income this year was $2.2 million. Last year's net income had been $1.8 million. (I also believe this should be classified as good news.)

    This is a good news, as long as other ...

    Solution Summary

    Good news versus bad news from annual report

    $2.49

    ADVERTISEMENT