Spencer Company reports the following amounts in its annual financial statements: Cash flow from operating activities $90,000 Capital expenditures $59,500* Cash flow from investing activities (68,000) Average current assets 136,000 Cash flow from financing activities (8,500) Average current liabilities 102,000 Net income 42,500 Total assets 255,000 * This amount is a cash outflow a. Compute Spencer's free cash flow. b. Compute Spencer's operating-cash-flow-to-current-liabilities ratio. c. Compute Spencer's operating-cash-flow-to-capital-expenditures ratio. Round ratios to two decimal points. a. Free cash flow Answer b. Operating-cash-flow-to-current-liabilities ratio Answer c. Operating-cash-flow-to-current-expenditures ratio Answer
Spencer Company reports the following amounts in its annual financial statements: Cash flow from operating activities $90,000 Capital expenditures $59,500* Cash flow from investing activities (68,000) Average current assets 136,000 Cash flow from financing activities (8,500) Average current liabilities 102,000 Net income 42,500 Total assets 255,000 * This amount is a cash outflow a. Compute Spencer's free cash flow. b. Compute Spencer's operating-cash-flow-to-current-liabilities ratio. c. Compute Spencer's operating-cash-flow-to-capital-expenditures ratio. Round ratios to two decimal points. a. Free cash flow Answer b. Operating-cash-flow-to-current-liabilities ratio Answer c. Operating-cash-flow-to-current-expenditures ratio Answer
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 32BE
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Cash Flow Ratios
Spencer Company reports the following amounts in its annual financial statements:
| Cash flow from operating activities | $90,000 | Capital expenditures | $59,500* | |
| Cash flow from investing activities | (68,000) | Average current assets | 136,000 | |
| Cash flow from financing activities | (8,500) | Average current liabilities | 102,000 | |
| Net income | 42,500 | Total assets | 255,000 |
* This amount is a cash outflow
a. Compute Spencer's
b. Compute Spencer's operating-cash-flow-to-
c. Compute Spencer's operating-cash-flow-to-capital-expenditures ratio.
Round ratios to two decimal points.
| a. Free cash flow | Answer |
| b. Operating-cash-flow-to-current-liabilities ratio | Answer |
| c. Operating-cash-flow-to-current-expenditures ratio | Answer |
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