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Statement of cash flows ratios

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Statement of cash flows ratios.

Financial statements for Olson Company are presented below:

Instructions

Calculate the following for Olson Company (provide calculation as well):

a. Current cash debt coverage ratio__________________________

b. Cash debt coverage ratio________________________________

c. Free cash flow ____________________________________

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Solution Summary

The solution explains the calculation of some ratios relating to statement of cash flows.

Solution Preview

a. Current Cash debt coverage = cash flow from operations/average current liabilities
Average current liabilities = (12,000+20,000)/2 = 16,000 (opening and closing accounts payable)
Current cash debt coverage = ...

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