Chapter 16, Problem 13E

To determine

Cash Flow Statement:

Cash flow statement is a part of financial statement which reflects the cash inflows and outflows during the year. For the preparation of Cash-flow statement, all the activities have been divided among three parts: Operating Activities, Investing Activities and Financing Activities. Operating Activities are main activities of the business and for which the business is meant to be established. Investing activities are activities relating to activities of sale and purchase of fixed assets and long term investment. The Financing Activities are Activities relating to issue and repayment of stock, bonds, long term liabilities and also serving the cost related to such activities.

Cash flows to Total assets ratio:

Cash flows to total assets ratio is a measure computed by dividing the cash flows by average total assets during the year. This measure is used to identify the efficiency of company to generate the cash flows by employing the total assets of the business. This ratio suggests the amount of cash flows generated by employing the $ amount of total assets.

The Cash flows to Total assets ratio shall be computed for two years.