Statement of Cash Flows Ratios

question 56

Essay

Statement of cash flows ratios.
Financial statements for Hilton Company are presented below: At the beginning of 2014, Accounts Payable amounted to $12,000 and Bonds Payable was $20,000.

Instructions
Calculate the following for Hilton Company:
a. Current cash debt coverage
b. Cash debt coverage
c. Free cash flow
d. Explain the purpose of free cash flow analysis.

---

Definitions:

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the equilibrium price, where market supply and demand balance.

Excise Tax

A tax on the production, sale, or consumption of a commodity in a country.

Demand Curves

A graphical representation showing the quantity of a good that consumers are willing and able to purchase at various price levels, holding other factors constant.