Calculating Ratios to Assess Liquidity and Solvency

Select information from One World Caf$$s statement of cash flows and comparative balance sheets follow.

Required

Calculate the operating cash flow to current liabilities $($OCFCL$)$ ratio for One World Caf$.$ Assume that the notes payable are due within the year and are a current liability.

Calculate One World Caf$$s operating cash flow to capital expenditures $($OCFCX$)$ ratio. What observations can you make about your findings for parts $1$ and $2?$

Choose the statement that best summarizes your observations.

Operating cash flows exceeded average current liabilities but not capital expenditures.

Calculate the free cash flow $($FCF$)$ for One World Caf$.$

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