Asked by Julian Munoz on Jul 15, 2024
Verified
A company had average total assets of $1,660,000,total cash flows of $1,320,000,cash flows from operations of $205,000,and cash flows from financing of $750,000.The cash flow on total assets ratio equals:
A) 45.2%.
B) 22.0%.
C) 11.65%.
D) 12.3%.
E) 79.5%.
Financing
The act of providing funds for business activities, making purchases, or investing.
Operations
The day-to-day activities involved in running a business, including production, sales, and administration, aimed at generating profits.
- Calculate and clarify the relationship between cash flow and total assets in terms of a ratio.
Verified Answer
EW
Esther WhangJul 20, 2024
Final Answer :
D
Explanation :
Cash flow on total assets ratio = Cash flows from operations/average total assets
Cash flow on total assets ratio = $205,000/$1,660,000
Cash flow on total assets ratio = 0.123 or 12.3%
Cash flow on total assets ratio = $205,000/$1,660,000
Cash flow on total assets ratio = 0.123 or 12.3%
Learning Objectives
- Calculate and clarify the relationship between cash flow and total assets in terms of a ratio.