Comparing Firms Using Ratio Analysis

Consider the following data for several pharmaceutical firms $($$ millions$).($None of the firms reported the proceeds from disposals of property, plant, and equipment.$)$

a$.$ Compute the operating cash flow to current liabilities $($OCFCL$)$ ratio for each firm.

b$.$ Compute the free cash flow for each firm.

c$.$ Comment on the results of your computations.

of the firms have sufficient cash flow to cover their current liabilities. All of the companies have

free cash flow that could be invested or returned to shareholders in the form of dividends or stock

repurchases.