Manning Company reported the following information for 2019: cash provided by operating activities, $425,000; cash used by
Question:
Manning Company reported the following information for 2019: cash provided by operating activities, $425,000; cash used by investing activities, $200,000; average debt maturing over the next 5 years, $80,000; capital expenditures, $275,000; cash dividends, $60,000.
Required:
Compute free cash flow and the cash flow adequacy ratio. Comment on each ratio?
Free Cash FlowFree cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...
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