How do you solve for debt coverage ratio?
During 2009, Cypress Semiconductor Corporation reported cash provided by operations of $89,303,000, cash used in investing of $43,126,000, and cash used in financing of $7,368,000. In addition, cash spent for fixed assets during the period was $25,823,000. Average current liabilities were $251,522,000, and average total liabilities were $286,214,500. No dividends were paid.
Calculate these values:
(a)Current cash debt coverage ratio
(b)Cash debt coverage ratio
What would the free cash flow be?
- CocoLv 76 years agoBest Answer
Free cash flow = Cash provided by operations - Capital expenditures - Cash dividends
$89,303,000 - 25,823,000 - 0 = $63,480,000
Current cash debt coverage = Cash provided by operations / Average current liabilities
$89,303,000 / 251,522,000 = 0.36
Cash debt coverage = Cash provided by operations / Average total liabilities
$89,303,000 / 286,214,500 = 0.31
- DeborahLv 44 years ago
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