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Cash flows ratios

Cash flows ratios
Course

Intermediate Microeconomic Analysis (ECON 311 )

130 Documents
Students shared 130 documents in this course
Academic year: 2023/2024
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Flows (1 of 5)

Without cash, a company will not survive.

Cash flow from Operations:

ï High amount – company is able to generate sufficient cash

to pay its bills.

ï Low amount ‐ company may have to borrow or issue equity

securities to pay bills.

Flows (2 of 5)

Financial Liquidity

Net Cash Provided by Operating Activities

Average

Curre

Curr

nt Ca

ent Liabil

sh

ities Debt Coverage

Ratio indicates whether the company can pay off its

current liabilities from internally generated cash flows. A

ratio near 1:1 is good.

Flows (4 of 5)

Free Cash Flow

Net Cash Provided

Capital

by Operating Cash Dividends

Expenditur

Fre

e

e

s

Activities

Cash Flow

  

The amount of discretionary cash flow a company has

that may be used for purchasing additional investments,

retiring its debt, purchasing treasury stock, or simply

adding to its liquidity.

Flows (5 of 5)

Free Cash Flow Computation

Nestor Company

Free Cash Flow Analysis

Net cash provided by operating activities $411,

Less: Capital expenditures 252,

Dividends 19,

Free cash flow $139,

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Cash flows ratios

Course: Intermediate Microeconomic Analysis (ECON 311 )

130 Documents
Students shared 130 documents in this course
Was this document helpful?
UsefulnessoftheStatementofCash
Flows(1of5)
Withoutcash,acompanywillnotsurvive.
CashflowfromOperations:
Highamount –companyisabletogeneratesufficientcash
topayitsbills.
Lowamount companymayhavetoborroworissueequity
securitiestopaybills.
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