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Operating-Cash-Flow-to-Capital-Expenditures Ratio The following information is from the financial statements of Smith & Sons. Cash flow...

Operating-Cash-Flow-to-Capital-Expenditures Ratio
The following information is from the financial statements of Smith & Sons.

Cash flow from operating activities $3,000,000
Capital expenditures 1,530,000
Current liabilities, beginning of year 600,000
Current liabilities, end of year 720,000

Calculate the operating-cash-flow-to-capital-expenditures ratio for Smith & Sons.

Round answer to two decimal places.

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Answer #1

Operating cash flow to capital expenditure ratio can be calculated by dividing the cash flow from operating activities by capital expenditure. Following is the formula for calculating operating cash flow to capital expenditure ratio.

Operating cash flow to capital expenditure ratio

= operating cash flow / capital expenditure

= 3,000,000 / 1,530,000 = 1.96

Operating cash flow to capital expenditure ratio of Smith & sons is 1.96.

The above are the detailed calculations,equations and explanations.

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