______________ refers to the ﬁrm's interest payments less any net new borrowing.

Question

Quizplus · Accepted Answer

Cash flow to creditors refers to the difference between a firm's interest payments and any new net borrowing. This cash flow is important because it measures the amount of cash a firm is generating from its operations that is used to pay off its creditors (such as lenders and bondholders). A positive cash flow to creditors means the firm is generating more cash than it needs to pay off its creditors, while a negative cash flow to creditors means the firm is borrowing more than it is paying off.

______________ Refers to the ﬁRm's Interest Payments Less Any Net