- Cash flow to creditors
Cash flow to creditorsis a firm's interest payments to creditors less net new borrowings.
Looking back at U.S. Corporation's income statement in Table 2.2, we
see that U.S. paid $70 in interest to creditors. Form the balance
sheets in Table 2.1, we see that long-term debt rose by $454 - 408
= $46. Net cash flow to creditors is thus:
|
1996 Cash Flow to Creditors |
|
| Interest paid |
$70
|
| - Net new borrowing |
46
|
| Cash flow to creditors |
$24
|
