Chapter 11, Problem 47E

To determine

(a)

Introduction:

Cash from operating activities more often than not alludes to the main segment of the announcement of cash streams. Cash from operating activities centers around the cash inflows and surges from an organization’s fundamental business activities of purchasing and selling stock, giving administrations, and so on.

To choose:

Prepare a statement of cash flow (indirect method) for Beckwith Product for 2019.

To determine

(b)

Introduction:

A company’s free cash how represents the cash flow that a company is able generate after considering the maintenance or expansion of its assets (capital expenditure) and the payment of dividends. Having positive free cash flow allows a company to pursuer profit-generating opportunities. However, negative free cash flow is not a necessarily a bad thing.

Cash flow adequacy Ratio: a second useful measure is the cash flow adequacy ratio. The cash adequacy ratio provides a measure of the company’s ability to meet its maturing debt obligation with its operating cash flow.

To choose:

Compute the following cash-based performance measure

1. Free cash flow
2. Cash flow adequacy

To determine

(c)

Introduction:

A company’s free cash how represents the cash flow that a company is able generate after considering the maintenance or expansion of its assets (capital expenditure) and the payment of dividends. Having positive free cash flow allows a company to pursuer profit-generating opportunities. However, negative free cash flow is not a necessarily a bad thing.

Cash flow adequacy Ratio: a second useful measure is the cash flow adequacy ratio. The cash adequacy ratio provides a measure of the company’s ability to meet its maturing debt obligation with its operating cash flow.

To choose:

What can you conclude by examining the patterns in Beckwith’s cash flow?