Using the above data, calculate the operating-cash-flow-to-current-liabilities ratio for Los Altos, Inc.  (Round to two decimals.)      Activity reported by Los Altos, Inc.Cash flow from operating activities$1,500,000 Capital expenditures850,000 Current liabilities, beginning of year300,000 Current liabilities, end of year360,000

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Chapter1: Financial Statements And Business Decisions
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Using the above data, calculate the operating-cash-flow-to-current-liabilities ratio for Los Altos, Inc.  (Round to two decimals.)   

 

Activity reported by Los Altos, Inc.Cash flow from operating activities$1,500,000 Capital expenditures850,000 Current liabilities, beginning of year300,000 Current liabilities, end of year360,000

Expert Solution
Step 1

Introduction:-

The following formula used to calculate the operating-cash-flow-to-current-liabilities ratio for Los Altos, Inc as follows under:-

Operating-cash-flow-to-current-liabilities ratio

=Operating-cash-flows / Current liabilities

Note:-

Operating cash flows means

=Net income + Non-cash expenses + Changes in working capital

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