Computing and Analyzing Cash Flow Ratios Selected financial information for Snap Inc. and Golden Eagle Inc. follows. ($ millions) Snap Golden Eagle Current liabilities, January 30, 2020 $17,238 $3,248 Current liabilities, January 31, 2019 15,638 3,259 Total liabilities, January 30, 2020 39,424 3,927 Total liabilities, January 31, 2019 33,420 2,394 Cash provided by operating activities, 2020 11,158 1,164 Cash paid for capital expenditures, 2020 5,808 1,164 Cash paid for dividends, 2020 2,526 669 a. For each company, compute the following ratios for the fiscal year ended January 30, 2020: current cash debt coverage, cash debt coverage, and free cash flow. Round your answer to two decimal places (for example, enter 20.46 for 20.4555558). For Fiscal Year Ended Jan 30, 2020 ($ millions) Snap Golden Eagle 1. Current cash debt coverage Answer Answer 2. Cash debt coverage Answer Answer 3. Free cash flow Answer Answer b. Briefly comment on the results. As compared to Golden Eagle Inc., Snap Inc has a: AnswerHigherLower Current cash debt coverage AnswerHigherLower Cash debt coverage These results indicate the following about Snap Inc. when comparing to Golden Eagle Inc.: AnswerWeakerStrongerUncertain Liquidity AnswerWeakerStrongerUncertain Solvency As compared to Golden Eagle, Snap Inc. has a: AnswerHigherLower Free cash flow This indicates the following about Snap Inc. when comparing to Golden Eagle Inc.: AnswerHigherLower Amount of cash available for discre

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 55PSA

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Computing and Analyzing Cash Flow Ratios

Selected financial information for Snap Inc. and Golden Eagle Inc. follows.

($ millions)	Snap	Golden Eagle
Current liabilities, January 30, 2020	$17,238	$3,248
Current liabilities, January 31, 2019	15,638	3,259
Total liabilities, January 30, 2020	39,424	3,927
Total liabilities, January 31, 2019	33,420	2,394
Cash provided by operating activities, 2020	11,158	1,164
Cash paid for capital expenditures, 2020	5,808	1,164
Cash paid for dividends, 2020	2,526	669

a. For each company, compute the following ratios for the fiscal year ended January 30, 2020: current cash debt coverage, cash debt coverage, and free cash flow.

Round your answer to two decimal places (for example, enter 20.46 for 20.4555558).

For Fiscal Year Ended Jan 30, 2020 ($ millions)	Snap	Golden Eagle
1. Current cash debt coverage	Answer	Answer
2. Cash debt coverage	Answer	Answer
3. Free cash flow	Answer	Answer

b. Briefly comment on the results.

As compared to Golden Eagle Inc., Snap Inc has a:

AnswerHigherLower	Current cash debt coverage
AnswerHigherLower	Cash debt coverage

These results indicate the following about Snap Inc. when comparing to Golden Eagle Inc.:

AnswerWeakerStrongerUncertain	Liquidity
AnswerWeakerStrongerUncertain	Solvency

As compared to Golden Eagle, Snap Inc. has a:

AnswerHigherLower

Free cash flow

This indicates the following about Snap Inc. when comparing to Golden Eagle Inc.:

AnswerHigherLower

Amount of cash available for discretionary purposes

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