Cash Flow Coverage Ratio
Based on the information provided in the balance sheet, please download the Cash Flow Template Download Cash Flow Templateand use it to answer the questions shown below. Show your work, including all calculations, and explain your answers in detail. This assignment should take approximately 1 hour to complete.
- Cash Flow Coverage Ratio
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- Explain the significance of the cash flow coverage ratio in assessing a company\\\’s financial health.
- Calculate the cash flow coverage ratio using the following scenario. Make sure to show all work:
Company XYZ has the following financial information for the year:
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- Operating Cash Flow: $800,000
- Total Fixed Expenses: $500,000
- Debt Service Costs: $200,000
- Cash Flow Margin
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- Discuss the importance of the cash flow margin in evaluating a company\\\’s profitability
- Calculate the cash flow margin from this set of financial data. Remember that you have to calculate the operating cash flow first. Make sure to show all work:
- Net Sales Revenue: $1,500,000
- Cost of Goods Sold: $800,000
- Operating Expenses: $400,000
- Non-operating Income: $50,000
- Taxes Paid: $100,000
- Operating Cash Flow Ratio
- Calculate the operating cash flow ratio based on the following financial information. Remember that you have to calculate the operating cash flow first. Make sure to show all work:
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- Net Income: $500,000
- Depreciation Expense: $100,000
- Interest Expense: $50,000
- Income Tax Expense: $75,000
- Cash Flow Return on Investment (CFROI)
- Define CFROI and its significance in evaluating investment efficiency.
- Discuss the factors influencing CFROI.
- Calculate CFROI based on the following data. Remember to determine total cash flows first. Make sure to show all work:
- Initial Investment: $1,000,000
- Operating Cash Flow (annual): $200,000
- Terminal Value (end of investment period): $1,500,000
- Investment period: 5 years
- Cash Conversion Cycle
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- Explain how the cash conversion cycle affects a company\\\’s liquidity and working capital management.
Requirements: no limit
Answer preview to Cash Flow Coverage Ratio
APA
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