QUESTION 19 hapter 1 hapter 2 Chapter 3 Not yet answered Points out of 3.00 PFla

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QUESTION 19 hapter 1 hapter 2 Chapter 3 Not yet answered Points out of 3.00 PFlag question Cash Flow Ratios Morgan Company reports the following amounts in its annual financial statements: Cash flow from operating activities $80,000 Capital expenditures$52,500* Cash flow from investing activities (60,000) Average current assets120,000 Cash flow from financing activities (7,500) Average current liabilities 90,000 Net income * This amount is a cash outflow Chapter 4 37,500 Total assets 225,000 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 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 Chapter 10 b. Operating-cash-flow-to-current-liabilities ratio Chapter 11 C. Operating-cash-fiow-to-current expenditures ratio Chapter 12

Explanation / Answer

a) Free cash flow = 80000-52500 = 27500

b) Operating cash flow to current liabilties = 80000/90000 = 0.89

c) Operating cash flow to capital expenditure ratio = 80000/52500 = 1.52

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