Question 3: Following is the Cash Conservation Equation, which always holds as an accounting equality. C- I = d + F where C = Net cash flow from operation inflow), I - Net cash flow for investment (outflow), C-1 - Free Cash Flow, d. Net payout to equity holders(cash dividends to common shareholders + acquisition of treasury stock - new share issues). Net cash flow to financial asset issuers and investors in debt securities. F Requirement A: Confirm if the Cash Conservation Equation holds for financial data below for the fiscal year of 2x10. (12 points) $850 300 Cash inflow from sales cash outflows for sales and general administration income tax paid on operating income . acquisition of operating fixed assets in cash cash interest paid (after tax) cash outflow to redeem borrowings . cash dividends to common shareholders cash raised by borrowing new loans 520 30 150 100 300 Requirement B: Based on your answer for the requirement A. what are characteristics of Dongguk Industry's cash flow of the year 2x10? (13 points) Question 4: Mr. Daniel Kim, the CFO of Gangnam Corp. plans to conduct a series of financial ratio analyses using comparative balance sheets and comprehensive income statement for the fiscal year of 2x19 as follows. In addition, Mr. Kim estimated the weighted cost of capital of Gangnam Corp. at 10% per annum for the same fiscal year. Comparative Balance Sheets Assets 2x19 2x18 2x19 2x18 Cash 50 40 150 120 Short-term lending Accounts receivable Inventories Liabilities and Shareholders Equity Account payable Advances from customers Short-term borrowings Long-term borrowings Bonds payble Building 780 600 Question 3: Following is the Cash Conservation Equation, which always holds as an accounting equality. C- I = d + F where C = Net cash flow from operation inflow), I - Net cash flow for investment (outflow), C-1 - Free Cash Flow, d. Net payout to equity holders(cash dividends to common shareholders + acquisition of treasury stock - new share issues). Net cash flow to financial asset issuers and investors in debt securities. F Requirement A: Confirm if the Cash Conservation Equation holds for financial data below for the fiscal year of 2x10. (12 points) $850 300 Cash inflow from sales cash outflows for sales and general administration income tax paid on operating income . acquisition of operating fixed assets in cash cash interest paid (after tax) cash outflow to redeem borrowings . cash dividends to common shareholders cash raised by borrowing new loans 520 30 150 100 300 Requirement B: Based on your answer for the requirement A. what are characteristics of Dongguk Industry's cash flow of the year 2x10? (13 points) Question 4: Mr. Daniel Kim, the CFO of Gangnam Corp. plans to conduct a series of financial ratio analyses using comparative balance sheets and comprehensive income statement for the fiscal year of 2x19 as follows. In addition, Mr. Kim estimated the weighted cost of capital of Gangnam Corp. at 10% per annum for the same fiscal year. Comparative Balance Sheets Assets 2x19 2x18 2x19 2x18 Cash 50 40 150 120 Short-term lending Accounts receivable Inventories Liabilities and Shareholders Equity Account payable Advances from customers Short-term borrowings Long-term borrowings Bonds payble Building 780 600
