The balance sheet of Sound Designs reports total assets of $750,000 and $800,000 at the beginning and end of the year,respectively.Sales revenues are $1.5 million ($1.2 million in the previous year),net income is $150,000,and net cash flows from operating activities are $175,000.What is Sound Designs' cash flow to sales?
A) 22.6%.
B) 11.7%.
C) 14.6%.
D) 13.0%.

Question

The balance sheet of Sound Designs reports total assets of $750,000 and $800,000 at the beginning and end of the year,respectively.Sales revenues are $1.5 million ($1.2 million in the previous year),net income is $150,000,and net cash flows from operating activities are $175,000.What is Sound Designs' cash flow to sales?
A)	22.6%.
B)	11.7%.
C)	14.6%.
D)	13.0%.

Quizplus · Accepted Answer

Cash flow to sales is calculated as net cash flows from operating activities divided by sales revenues. Thus, $175,000 / $1,500,000 = 11.7%.

The Balance Sheet of Sound Designs Reports Total Assets of $750,000