Cash Flow Ratios Spencer Company reports the following amounts in its annual financial statements: Cash flow from operating activities $80,000 Capital expenditures $52,500* Cash flow from investing activities (60,000) Average current assets 120,000 Cash flow from financing activities (7,500) Average current liabilities 90,000 Net income 37,500 Total assets 225,000 * This amount is a cash outflow a. Compute Spencer's free cash flow. b. Compute Spencer's operating- cash-flow-to-current-liabilities ratio.

Cash Flow Ratios Spencer Company reports the following amounts in its annual financial statements: Cash flow from operating activities $80,000 Capital expenditures $52,500* Cash flow from investing activities (60,000) Average current assets 120,000 Cash flow from financing activities (7,500) Average current liabilities 90,000 Net income 37,500 Total assets 225,000 * This amount is a cash outflow a. Compute Spencer's free cash flow. b. Compute Spencer's operating- cash-flow-to-current-liabilities ratio.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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