1. What is a limitation of free cash flow in comparing one company to another?
2. Business application- In what way is selling an investment for a gain potentially a negative in evaluating quality of earnings?
3. Business application- Is it unethical for new management to take an extra large write-off (a "big bath") in order to reduce future costs? Why or why not?
4. Business application- Why is it useful to disclose discontinued operations separately on the income statement?
5. Business application- Why is it essential that management compensation, including bonuses, be linked to financial goals and strategies that achieve shareholder value?
6. Business application- What is one way a company can improve its earnings per share without improving its earnings or net income?