Kellogg’s reported net cash provided by operating activities of $1,793 million d

Question

Kellogg’s reported net cash provided by operating activities of $1,793 million during 2014. General Mills reported net cash provided by operating activities of $2,541.0 million. Total current liabilities reported by Kellogg’s at December 28, 2013, and General Mills at May 26, 2013, were $3,835 million and $5,293.9 million, respectively. Compute the cash flow from operations to current liabilities ratio for each company for 2014. Round your answers to two decimal places.

Explanation / Answer

Solution :-

Cash flow from operations to current liabilities ratio = Net cash provided by operating activities / Average current liabilities.

Average current liabilities for Kellogg’s = (3835 Million + 4364 Million) / 2 = $ 4099.50 Million.

Average current liabilities for General mills = (5293.9 Million + 5423.5 Million) / 2 = $ 5358.7 Million.

Accordingly, Cash flow from operations to current liabilities ratio for Kellogg’s = 1793 Million / 4099.50 Million

= 0.44 (approx).

Accordingly, Cash flow from operations to current liabilities ratio for General mills = 2541 Million / 5358.7 Million

= 0.47 (approx).

Conclusion :-

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