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Answer: Cash flow accruals ratio only
## Explanation To determine which accruals ratios have improved, we need to analyze the changes: **Balance Sheet Accruals Ratio:** - Most Recent Year: 9.8% - Prior Year: 1.3% - Change: Increased from 1.3% to 9.8% (worsened) **Cash Flow Accruals Ratio:** - Most Recent Year: -1.4% - Prior Year: -6.7% - Change: Increased from -6.7% to -1.4% (improved) **Analysis:** - A lower (more negative) cash flow accruals ratio indicates better earnings quality - The cash flow accruals ratio improved from -6.7% to -1.4% - The balance sheet accruals ratio worsened from 1.3% to 9.8% Therefore, only the cash flow accruals ratio improved.
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| Most Recent Year | Prior Year | |
|---|---|---|
| Balance sheet accruals ratio | 9.8% | 1.3% |
| Cash flow accruals ratio | –1.4% | –6.7% |
Which of the company's accruals ratios have improved?
A
Cash flow accruals ratio only
B
Balance sheet accruals ratio only
C
Both the cash flow accruals ratio and the balance sheet accruals ratio
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