The comparative statements of financial position of Menachem NV at the beginning and end of the year
Net income of ¬34,000 was reported, and dividends of ¬23,000 were paid in 2019. New equipment was purchased and none was sold.
a. Prepare a statement of cash flows for the year 2019.
b. Compute the current ratio (current assets Ã· current liabilities) as of January 1, 2019, and December 31, 2019, and compute free cash flow for the year 2019.
c. In light of the analysis in (b), comment on Menachem's liquidity and financial flexibility.
Free 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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