Joe Novak Corporation reports the following information: $\begin{array}{lr}
\text { Net cash provided by operating activities } & \$ 215,000 \
\text { Average current liabilities } & 150,000 \
\text { Average long-term liabilities } & 100,000 \
\text { Dividends declared } & 60,000 \
\text { Capital expenditures } & 110,000 \
\text { Pavments of debt } & 35,000
\end{array}$
Joe Novak's cash debt coverage ratio is
A)0.86.
B)1.43.
C)2.15.
D)4.78.

Question

Joe Novak Corporation reports the following information: $\begin{array}{lr}
\text { Net cash provided by operating activities } & \$ 215,000 \
\text { Average current liabilities } & 150,000 \
\text { Average long-term liabilities } & 100,000 \
\text { Dividends declared } & 60,000 \
\text { Capital expenditures } & 110,000 \
\text { Pavments of debt } & 35,000
\end{array}$ 
Joe Novak's cash debt coverage ratio is
A)0.86.
B)1.43.
C)2.15.
D)4.78.

Quizplus · Accepted Answer

The cash debt coverage ratio is calculated by dividing the net cash provided by operating activities by the average of current and long-term liabilities. In this case, the cash debt coverage ratio is $215,000 / ((150,000 + 100,000) / 2) = 0.86.

Joe Novak Corporation Reports the Following Information Joe Novak's Cash Debt Coverage Ratio Is A)0

Joe Novak Corporation Reports the Following Information Joe Novak's Cash Debt Coverage Ratio Is
A)0