The balance sheet of Sound Designs reports total assets of $750,000 and $800,000 at the beginning and end of the year, respectively. Sales revenues are $1.5 million ($1.2 million in the previous year), net income is $150,000, and net cash flows from operating activities are $175,000. What is Sound Designs' cash flow to sales?

Question

Quizplus · Accepted Answer

Cash flow to sales is calculated as net cash flows from operating activities divided by sales revenues. $175,000 / $1,500,000 = 11.7%.

The Balance Sheet of Sound Designs Reports Total Assets of $750,000