Menu QUESTION 28 Incorrect 0.00 poincs out of 1.00 Flag question Operating-Cash-

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Menu QUESTION 28 Incorrect 0.00 poincs out of 1.00 Flag question Operating-Cash-Flow-to-Current-Liabilities Ratio The following information is from the financial statements of Smith & Sons Cash fiow from operating activities $2,400,000 Capital expenditures Current liabilities, beginning of year 420,000 Current liabilities, end of year 1,360,000 504,000 Calculate the operating-cash-flow-to-current-liabilities ratio for Smith& Sons. Round answer to two decimal places. 5.71 Check You have correctly selected 0 Incorrect Marks for this submission: 0.00/1.00

Explanation / Answer

Average current liabilities for the year = (420000 + 504000) /2 = 462000

Operating cash flow to current liabilities = Opearting cash flow / Average current liabilities

2400000 / 462000 = 5.19

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