It is January 2nd and senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 75,000 shares of stock plus a new bond issue. Assume the stock can be issued at yesterday?s stock price ($29.57) and leverage changes to 2.8. Which of the following statements are true? Select all that apply.
Cash Flow Statement Survey Cash flows from operating activities Net Income (Loss) Adjustment for non-cash items: Depreciation Extraordinary gainsllosseslwriteoffs Changes in current assets and liabilities: Accounts payable Inventory Accounts receivable Net cash from operations Cash flows from investing activities Plant improvements (net) Cash flows from financing activities Dividends paid Sales of common stock Purchase of common stock Cash from long term debt issued Early retirement of long term debt Retirement of current debt Cash from current debt borrowing Cash from emergency loan Net cash from nancing activities Net change in cash position Andrews $12,869 $10,082 $0 $1 ,062 $20,954 ($4,377) $40,590 ($26,320) $0 $5,000 $0 $20,000 $0 $0 $0 $0 $25,000 $39,270 Baldwin $14,433 $7,711 $0 $976 ($2,279) ($1,546) $19,293 ($21 ,700) $0 $1,769 $0 $16,350 $0 ($14,265) $17,199 $0 $21,054 $18,647 Chester ($4,977) $14,367 $0 ($1,978) $5,610 $1,520 $14,542 ($37,940) $0 $9,706 $0 $23,660 $0 ($25,203) $30,376 $0 $43,539 $20,141 Digby ($1,568) $13,024 $0 $120 $3,253 ($1,113) $13,716 ($50,460) $0 $16,362 $0 $33,691 $0 ($21 ,740) $21 ,332 $0 $51,665 $14,921 Balance Sheet Survey Andrews Baldwin Chester Digby Cash $39,992 $34,107 $45,399 $33,105 Accounts Receivable $18,122 $13,249 $11,038 $10,462 Inventory $3,941 $16,429 $6.628 $8,672 Total Current Assets $62,055 $63,785 $63,065 $52,240 Plant and equipment $164,232 $115,660 $215,500 $215,760 Accumulated Depreciation ($61,952) ($48,997) ($77,469) ($70,200) Total Fixed Assets $102,280 $66,663 $138,031 $145,560 Total Assets $164,335 $130,448 $201,096 $197,800 Accounts Payable $10,262 $8,687 $6.879 $6.469 Current Debt $11 .300 $28,499 $41 .676 $32,632 Long Term Debt $42,909 $25,837 $85,606 $81 .544 Total Liabilities $64,471 $63,023 $134,161 $120,646 Common Stock $17,080 $10,608 $37,336 $37,028 Retained Earnings $82,784 $56,817 $29,598 $40,126 Total Equity $99,864 $67,425 $66,934 $77,155 Total Liabilities 8- Owners' Equity $164,335 $130,448 $201,096 $197,800 Income Statement Survey Andrews Baldwin Chester Digby Sales $220,481 $161,200 $134,295 $127,291 Variable Costs (Labor. Material, Carry) $146,279 $105,383 $90,099 $83,004 Depreciation $10,082 $7,711 $14,367 $13,024 SGA (R&D. Promo. Sales. Admin) $28,372 $12,104 $13,751 $16,583 Other (Fees. Writeoffs. TQM. Bonuses) $9.600 $7.157 $7.418 $2.604 EBIT $26,148 $28,845 $8,660 $12,076 Interest (Short term. Long term) $5.945 $6,188 $16,316 $14,488 Taxes $7.071 $7.930 ($2,680) ($844) Prot Sharing $263 $295 $0 $0 Net Prot $12,869 $14,433 ($4,977) ($1,568)
