What is the proper measure of cash flow to creditors in a given year?
A) Interest paid.
B) Operating cash flow minus net new borrowing.
C) Interest paid plus changes in long-term debt.
D) Interest paid plus net new borrowing minus additions to net fixed assets.
E) Interest paid minus net new borrowing.

Question

Quizplus · Accepted Answer

Cash flow to creditors is calculated as interest paid minus net new borrowing, representing the net cash outflow to creditors after accounting for new debt raised.

What Is the Proper Measure of Cash Flow to Creditors