Leasing For Leasee

Question 1

Statements effect

Answer 1

BS - PMT (PV)

Financial lease vs Oper
Asst incr CL incr LTD incr Cash same

IS oper exp(depreciation for fin, rent for oper) decr, Non oper exp (inter) incr, ebit incr, expenses early yrs incr, NI early yrs decr, tax incr

CFS - int exp Cfo, principal Cff
Cfo incr, cff decr, total CF same

Ratio effect
Asst turn decr, ROA decr, Current decr, d/e incr, d/a incr, ROE decr