Ratio Analysis Following are totals from selected financial statements of Magdal
ID: 2526645 • Letter: R
Question
Ratio Analysis
Following are totals from selected financial statements of Magdalene Corporation for the years ended December 31, 2016 and 2017:
Required:
1. Calculate the operating cash flow ratio for the year ended December 31, 2017. If required, round your answer to two decimal places.
Operating cash flow ratio =
2. Calculate the operating cash flow to total liabilities ratio for the year ended December 31, 2017. If required, round your answer to two decimal places.
Operating cash flow to total liabilities ratio =
12/31/16 12/31/17 Cash flows provided by operating activities $102,000 $82,000 Cash flows provided by investing activities 16,000 33,000 Cash flows used by financing activities (40,000) (25,000) Net increase in cash $ 78,000 $ 90,000 Net income $ 60,000 $ 24,000 Current assets 126,000 144,000 Total assets 560,000 650,000 Current liabilities 92,000 116,000 Total liabilities 344,000 410,000Explanation / Answer
1) Operating cash flow ratio = cash flow provided by operating activities / current liabilities
= $82000/116000= 0.70
2) Operating cash flow to total liabilities ratio = cash flow provided by operating activities / Total liabilities
= $82000/ 410000 = 0.2
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