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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

FINANCIAL ACCOUNTING
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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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 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
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