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faisy
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Joined: 08 May 2010
Location: Australia
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| Posted: 16 Jul 2012 at 23:08 | IP Logged
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can someone explain the relationship b/w Operation CF to
Total Debt Ratio.
Q. in order to improve its operation cash flow to total
devt ratio, a firm reporting under IFRS will classify:
a. Taxes paid as CFO
b. Interest paid as CFI
c. Dividend paid as CFF (Correct answer)
d. Dividend Received as CFI
Would appreciate a lot if someone help.
thanks
Fasy
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Faisy
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dandanchaoren
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| Posted: 17 Jul 2012 at 23:22 | IP Logged
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In order to improve the ratio, you would either need to
increase CFO or decrease debt. IFRS is more flexible than
GAAP in classifying the items listed in the choices.
taxes can be CFO, CFI or CFF; choice a) paid as CFO
decreases CFO
Interest paid can CFF or CFO; choice b) wrong
classification in answer selection
Dividend Paid can be CFF or CFO; correct answer,
classifying payment somewhere else improves CFO
Dividend Received can be CFI or CFF; C) doesn't do anything
to CFO
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faisy
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| Posted: 18 Jul 2012 at 20:11 | IP Logged
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Thanks my friend
i got it now
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Faisy
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Topic: Cash Flow Ratios
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