What is the cash flow of the firm, or CF(A), for 2017? CASA Rubber, Inc 2017 Inc

Question

What is the cash flow of the firm, or CF(A), for 2017? CASA Rubber, Inc 2017 Income Statement 28,000.00 16,500.00 1,030.00 Net sales Cost of goods sold Selling, general, and administrative expenses Depreciation Earnings before interest and taxes Interest Pretax income Taxes Net income 1,100.00 9,370.00 320.00 9,050.00 3077.00 5,973.00 2016 298 3,006 5,310 8,614 asa Rubber, Inc. 2016 and 2017 Balance Sheets 2017 306 3,422 5,950 9,678 2016 6,219 1,880 8,099 17,536 2017 6,384 1,625 8,009 20,291 Cash Accounts receivable Inventory Accounts payable Accrued expenses Total Total Long-term debt 15,344 15,978 32,365 40,979 34,600 44,278 Net fixed assets Owners' equity Total liabilities and equity Total assets 40,979 44,278 $2,512 -$1,724 $1,724 $890 $2,904

Explanation / Answer

Answer is $2,904

Operating Cash Flow = EBIT + Depreciation - Taxes
Operating Cash Flow = $9,370 + $1,100 - $3,077
Operating Cash Flow = $7,393

Net Capital Spending = Depreciation + Ending Net Fixed Assets - Beginning Net Fixed Assets
Net Capital Spending = $1,100 + $34,600 - $32,365
Net Capital Spending = $3,335

Change in NWC = Ending NWC - Beginning NWC
Change in NWC = ($9,678 - $8,009) - ($8,614 - $8,099)
Change in NWC = $1,669 - $515
Change in NWC = $1,154

Cash Flows = Operating Cash Flow - Net Capital Spending - Change in NWC
Cash Flows = $7,393 - $3,335 - $1,154
Cash Flows = $2,904

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