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.
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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Spencer Company reports the following amounts in its annual financial statements:
| Cash flow from operating activities | $65,000 | Capital expenditures | $42,000* | |
| Cash flow from investing activities | (48,000) | Average current assets | 96,000 | |
| Cash flow from financing activities | (6,000) | Average current liabilities | 72,000 | |
| Net income | 30,000 | Total assets | 180,000 |
* 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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