1.
Introduction:The ratio that is used to calculate if enough
To calculate:The cash flow adequacy ratio of the company.
2.
Introduction: The ratio that is used to calculate if enough cash flows are generated by operation to pay off the expenses is termed as cash adequacy ratio. It suggests the ability of a company to cover up its annual cost of debt with the help of cash flow from operations.
To state:The importance of cash adequacy ratio and how the ratio derived in part 1 can be used in determining if a company is eligible for loan or not.
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Chapter 12 Solutions
Financial Accounting: The Impact on Decision Makers
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