Question

The following information is available from various financial statements for Round Rock, Inc.:
Net cash inflow from operating
Activities................................................................ $700,000
Net cash outflow from investing
activities................................................................ 926,000
Cash purchases of property, plant, and
equipment................................................................ 580,000
Interest expense...................................................... 114,000
Tax expense............................................................ 256,000
Net income............................................................... 468,000
Current assets............................................................ 359,200
Current liabilities........................................................ 184,200
Required:
(a) Compute the current ratio and the operating cash flow ratio. Discuss any significant differences between the two ratios.
(b) Calculate the times interest earned ratio and the cash interest coverage ratio. Discuss any significant differences between the two ratios.
(c) Calculate free cash flow for Round Rock, Inc. Discuss any significant differences between FCF and net income.


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  • CreatedMarch 27, 2015
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