CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Which of the following indicates a company's ability to cover currently maturing obligations from recurring operations?
A. Cash flow from operations to current liabilities
B. Working capital
C. Quick ratio
Explanation: Free cash flow is the excess of operating cash flow over basic needs.

User Contributed Comments 4

User Comment
murli Good one. Current obligations to recurring operations = CFO/CL. Can't use Income while measuring non-income statement elements!
chenyx current obligations to recurring operates=CFO/CL
lemec Actually, recurring operations to current obligations = CFO / CL
scottm8571 The quick ratio is literally defined as "a company's ability to satisfy current liabilities" which include currently maturing obligations. This question did not have to walk this fine a line with the answers given.
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