The ABC Corporation has the following information. How much is the Cash Flow to Creditors? АВС Coгporation 1,588 Earnings before Interest & taxes Depreciation Beginning net fixed assets Interest paid Net new equity raised Net new borrowing 130 1,650 150 450 110 424 Тахes O$110 O $40 $340 $1,200 $1,650

$40

Explanation:

Cash-flow to creditors is that amount of cash that the business paid to creditors during a period. It is calculated by removing the net new borrowings from the interest payments for the period to the creditors.

Cash-flow to Creditors = Interest Paid - Net Borrowing

Cash-flow to Creditors  = 150 - 110

Cash-flow to Creditors = $40

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