Brief Exercise 12-9 Suppose during 2014, Cypress Semiconductor Corporation reported net cash provided by operating activities 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: (Round ratios to 2 decimal places, e. g. 2.26.)

Answer and Explanation:

The computation is shown below:

a. Free cash flow

= Net cash provided by operating activities - cash spent for fixed assets during the period

= $89,303,000 - $25,823,000

= $63,480,000

b. Current cash debt coverage

= Net cash provided by operating activities : average current liabilities

= $89,303,000 : $251,522,000

= 0.36

c. Cash debt coverage

= Net cash provided by operating activities : average total liabilities

= $89,303,000 : $286,214,500

= 0.31

We simply applied the above formula