Question

Windsor, Inc. reported the following selected information at March 31. 2017 Total current assets $234,000 Total assets 440,000 Total current liabilities 292,500 Total liabilities 369,600 Net cash provided by operating activities 64,000 Calculate the current ratio, the debt to assets ratio, and free cash flow for March 31, 2017. The company paid dividends of $12,000 and spent $26,000 on capital expenditures. (Round current ratio and debt to assets ratio to 2 decimal places, e.g. 15.25. If answer is negative enter it with a negative sign preceding the number e.g. -15,000 or in parentheses e.g. (15,000).)

Answer 1

Answer:

The current ratio, the debt to assets ratio, and free cash flow for March 31, 2017 is 0.8 : 1, 90.20%, $26,000 respectively.

Explanation:

Current ratio = Current assets ÷ current liabilities

                     = $234,000 ÷ $292,500

                     = 0.8 : 1

Debt ratio = Total liabilities ÷ Total assets

                 = $369,600 ÷ $440,000

                  = 90.20%

Free cash flow = Net cash provided by operating activities  - dividend paid - capital expenditure

= $64,000 - $12,000 - $26,000

= $26,000