Computing and Analyzing Cash Flow Ratios Selected financial information for Snap Inc. and Golden Eagle Inc. follows. ($ millions) Snap Golden Eagle Current liabilities, January 30, 2020 $17,238 $3,248 Current liabilities, January 31, 2019 15,638 3,259 Total liabilities, January 30, 2020 39,424 3,927 Total liabilities, January 31, 2019 33,420 2,394 Cash provided by operating activities, 2020 11,158 1,164 Cash paid for capital expenditures, 2020 5,808 1,164 Cash paid for dividends, 2020 2,526 669 a. For each company, compute the following ratios for the fiscal year ended January 30, 2020: current cash debt coverage, cash debt coverage, and free cash flow. Round your answer to two decimal places (for example, enter 20.46 for 20.4555558). For Fiscal Year Ended Jan 30, 2020 ($ millions) Snap Golden Eagle 1. Current cash debt coverage Answer Answer 2. Cash debt coverage Answer Answer 3. Free cash flow Answer Answer b. Briefly comment on the results. As compared to Golden Eagle Inc., Snap Inc has a: AnswerHigherLower Current cash debt coverage AnswerHigherLower Cash debt coverage These results indicate the following about Snap Inc. when comparing to Golden Eagle Inc.: AnswerWeakerStrongerUncertain Liquidity AnswerWeakerStrongerUncertain Solvency As compared to Golden Eagle, Snap Inc. has a: AnswerHigherLower Free cash flow This indicates the following about Snap Inc. when comparing to Golden Eagle Inc.: AnswerHigherLower Amount of cash available for discre

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Computing and Analyzing Cash Flow Ratios

Selected financial information for Snap Inc. and Golden Eagle Inc. follows.

($ millions)	Snap	Golden Eagle
Current liabilities, January 30, 2020	$17,238	$3,248
Current liabilities, January 31, 2019	15,638	3,259
Total liabilities, January 30, 2020	39,424	3,927
Total liabilities, January 31, 2019	33,420	2,394
Cash provided by operating activities, 2020	11,158	1,164
Cash paid for capital expenditures, 2020	5,808	1,164
Cash paid for dividends, 2020	2,526	669

a. For each company, compute the following ratios for the fiscal year ended January 30, 2020: current cash debt coverage, cash debt coverage, and free cash flow.

Round your answer to two decimal places (for example, enter 20.46 for 20.4555558).

For Fiscal Year Ended Jan 30, 2020 ($ millions)	Snap	Golden Eagle
1. Current cash debt coverage	Answer	Answer
2. Cash debt coverage	Answer	Answer
3. Free cash flow	Answer	Answer

b. Briefly comment on the results.

As compared to Golden Eagle Inc., Snap Inc has a:

AnswerHigherLower	Current cash debt coverage
AnswerHigherLower	Cash debt coverage

These results indicate the following about Snap Inc. when comparing to Golden Eagle Inc.:

AnswerWeakerStrongerUncertain	Liquidity
AnswerWeakerStrongerUncertain	Solvency

As compared to Golden Eagle, Snap Inc. has a:

AnswerHigherLower

Free cash flow

This indicates the following about Snap Inc. when comparing to Golden Eagle Inc.:

AnswerHigherLower

Amount of cash available for discretionary purposes

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 7 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions