Segment 1B Q2

9. Cash Flow to Stockholders and Creditors [LO4] Could a companys cash flow to stockholders be negative in a given year? (Hint: Yes.) Explain how this might come about. What about cash flow to creditors?

This chart came with the problem, I'm not sure if it applies but if it does please use it to help

Cash Flow From Assets Problem:

Calculate each step of the cash flow from assets based on the following information. Use the examples in the presentation as a guide.

Working Capital Accounts:

2015: Current Assets = 4,400; Current Liabilities = 1,500

2014: Current Assets = 3,500; Current Liabilities = 1,200

Fixed Assets and Depreciation:

2015: Net Fixed Assets = 3,400

2014: Net Fixed Assets = 3,100

Depreciation Expense = 400

Long-Term Debt and Equity:

2015: Long-Term Debt = 4,000; Common Stock = 400

2014: Long-Term Debt = 3,950; Common Stock = 400

Income Statement:

EBIT = 2,000

Taxes = 300

Interest Expense = 350

Dividends = 500