Profit, Loss, and Earnings Quality

The profit equation

Revenues and gains are not the same

Profit versus cash flow

Earnings quality in analysis

A firm reports revenues of 900,000 dollars, gains of 30,000 dollars, expenses of 740,000 dollars, and losses of 10,000 dollars. What is net income?

A bakery sells bread daily and also sells its old delivery truck this year at a profit. How should the two inflows be classified?

Which description best fits high-quality earnings?

A profitable company runs out of cash and cannot pay its employees. What best explains how profit and cash diverged?

For several years a firm's operating cash flow has run persistently below its net income. What is the most likely reading?

According to the lesson, why is the statement of cash flows necessary at all?

When expenses and losses exceed revenues and gains, the firm reports a net what? Answer with one word.

What one-word term names recurring inflows from a firm's primary business activities, as opposed to one-time gains? Answer in lowercase.

What four-letter term names an infrequent increase in value from an activity ancillary to the firm's main business, such as selling a delivery truck? Answer in lowercase.

What three-letter abbreviation names the environmental, social, and governance lens often applied alongside earnings quality analysis? Write the abbreviation.