Question

how is the operating cash flow ratio calculated?
dividing current assets by current liabilities
dividing cash and accounts receivable by current liabilities
dividing operating cash flows by current liabilities

Explanation:

The operating cash flow ratio measures a company's ability to pay current liabilities with cash from operations. The formula is Operating Cash Flow (from operating activities) divided by Current Liabilities. The first option is the current ratio (current assets / current liabilities), the second is not a standard ratio for operating cash flow, while the third matches the operating cash flow ratio formula.

Answer:

C. dividing operating cash flows by current liabilities (assuming the third option is labeled C; if the options are unlabeled, it's "the third option" with the text "dividing operating cash flows by current liabilities")