Cash flow to creditors is computed from the interest paid minus net new borrowings and cash flow to owners is computed from the dividends paid minus net new equity.

Question

Quizplus · Accepted Answer

This statement is true. Cash flow to creditors is calculated by subtracting net new borrowings from the interest paid, and cash flow to owners is calculated by subtracting net new equity from the dividends paid.

Cash Flow to Creditors Is Computed from the Interest Paid