Branden Wil QUESTION9 Answer saved Points out of 15.00 Flag question Cash Flow R

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Branden Wil QUESTION9 Answer saved Points out of 15.00 Flag question Cash Flow Ratios Morgan Company reports the following amounts in its annual financial statements: Cash flow from operating activities $65,000 Capital expenditures $52,500* Cash flow from investing activities (60,000) Average current assets 130,000 Cash flow from financing Average current (8,500) liabilities 90,000 activities Net income * This amount is a cash outflow 37,500 Total assets 225,000 a. Compute Morgan's free cash flow. b. Compute Morgan's operating-cash-flow-to-current-liabilities ratio. c. Compute Morgan's operating-cash-flow-to-capital-expenditures ratio. Round ratios to two decimal points. a. Free cash flow 0 b. Operating-cash-flow-to-current-liabilities ratio c. Operating-cash-flow-to-current-expenditures ratio Next page Save Answers Previous page ASSIGNMENT NAVIGATION

Explanation / Answer

a. Free cash flow Cash flow from operating activities - Capital expenditures 12,500 (65,000-52,500) b. Operating cash flow to current liabilities ratio Cash flow from operating activities / average current liabilities 72.22% (65,000/90,000) c. Operating cash flow to capital expenditures ratio Cash flow from operating activities / capital expenditures 123.81% (65,000/52,500)

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