The cash flow from operations to capital expenditures ratio measures a company's ability to
A)use operations to finance its acquisitions of productive assets.
B)use cash flows from capital expenditure transactions to maintain working capital.
C)increase its capital expenditures as a result of profitable operations.
D)pay its current bills from profits made using productive assets.

Question

Quizplus · Accepted Answer

This ratio measures a company's ability to use its cash flows from operations to fund its purchase of productive assets, thus indicating if a company is able to self-finance its growth rather than relying on external financing.

The Cash Flow from Operations to Capital Expenditures Ratio Measures