1.

Read the following Balance Sheet for the next two questions:

Cash $ 134,000 Accounts payable $ 210,000

Accounts receivable 105,000 Notes payable 160,000

Inventory 293,000 Current liabilities $ 370,000

Current assets $ 532,000 Long-term debt 845,000

Total liabilities $1,215,000

Tangible Fixed 1,730,000

Intangible net fixed assets 670,000 Common stock $264,000

Accumulated ret. earnings 1,453,000

Total assets $2,932,000 Total liab. & owners equity $2,932,000

Question:

How much working capital does the firm have ? Formula: Current Assets - Current Liabilities

Outside of Cash, what are other sources of liquidity?

2.Given the following information, calculate operational cash flow (OCF).

		Income Statement
		Sales	$30,096
		Cost of goods sold	21,476
		Depreciation	5,341
		EBIT	$ 3,279
		Interest	2,409
		Taxable income	$ 870
		Taxes (35%)	305

OCF = EBIT +Depreciation - Taxes

3. Barlows Feed had the following current account values. What effect did the change in net working capital have on the firm's cash flows for the year?
			Beginning of Year			End of Year
	Cash	$	179		$	164
	Accounts receivable		415			480
	Inventory		987			923
	Accounts payable		562			649

Net source of cash of $101

Net use of cash of $73

Net use of cash of $88.

Net source of cash of $86