Question
a. Operating cash flow for 2019- Operating cash flow= Sales - (Costs + Other expenses) - Tax Operating cash flow= $178,000 - ($103,600 + $5,100)
a. Operating cash flow for 2019-
Operating cash flow= Sales - (Costs + Other expenses) - Tax
Operating cash flow= $178,000 - ($103,600 + $5,100) - $12,705
Operating cash flow=$56,595
b. Cash flow to creditors for 2019-
Cash flow to creditors= Interest Paid + redemption of long term loans
Cash flow to creditors= $8,900+$4,000
Cash flow to creditors= $12,900
c. Cash flow to stockholders for 2019-
Cash flow to stockholders= dividend payments - new stock issues + redemption of shares.
Cash flow to stockholders= $10,143 - $2,900+0
Cash flow to stockholders= $7,243
d. If net fixed assets increased by $23,140 during the year, what was the addition to NWC-
Cash flow to creditors plus cash flow to stockholders equals cash flow from assets which means cash flow from assets is:
Cash flow from assets = Cash flow to creditors + Cash flow to stockholders
Cash flow from assets = $12,900 + $7,243
Cash flow from assets = $20,143
Net capital spending = Depreciation + Increase in fixed assets
Net capital spending = $12,100 + $23,140
Net capital spending = $35,240
Cash flow from assets = OCF Change in NWC Net capital spending
$20,143 = $56,595 Change in NWC $35,240
Change in NWC = $1,212
Please mention your doubts in the comment box, if any.
Thanks.
LO 4 12. Calculating Cash Flows Given the information for Whelan, Inc., in Problems 10 and 11, suppose you also know that the firm's net capital spending for 2019 was $745,000 and that the firm reduced its net working capital investment by $94,300. What was the firm's 2019 operating cash flow, or OCFStep by Step Solution
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