没明白题目

问题如下：

Question

Cash Flow Statement for the Year Ended 31 December of Year 2

Cash Flow Coverage Ratios

Compared with Year 1, the most appropriate conclusion an analyst can make about Year 2 is that the company’s ability to use operating cash flows to:

选项：

A.acquire assets improved.

B.pay dividends decreased.

C.acquire assets, pay debts, and make distributions to owners decreased.

解释：

Solution

1. Incorrect. The company’s reinvestment coverage ratio worsened. Calculations are as follows:

   Reinvestment coverage ratio

   

2. Correct. The company’s dividend payment coverage ratio worsened; therefore, the company was less able to pay dividends from operating cash flows. Calculations are as follows:

   

3. Incorrect. The company’s investing and financing coverage ratio improved. Calculations are as follows:

   Investing and financing coverage ratio

   

   Analyzing Statements of Cash Flows II

   • calculate and interpret free cash flow to the firm, free cash flow to equity, and performance and coverage cash flow ratios