The 2014 balance sheet of Sugarpova\'s Tennis Shop. Inc, shoed long-term debt of
ID: 2716564 • Letter: T
Question
The 2014 balance sheet of Sugarpova's Tennis Shop. Inc, shoed long-term debt of $6.4 million, and the 2015 balance sheet showed long-term debt of $6.6 million. The 2015 income statement showed an interest expense of $225,000. During 2015, the company had a cash flow to creditors of $25,000 and the cash flow to stockholders for the year was $80,000. Suppose you also know that the firm's net capital spending for 2015 was $1,490,000 and that the firm reduced its net working capital investment by $93,000.
What was the firm's 2015 operating cash flow, or OCF?
Operating cash flow: $?????
Explanation / Answer
Cash flow to Creditors = 25000
Cash flow to stockholders = 80000
Cash Flow from Assets = Cash Flow to Creditors + Cash Flow to Stockholders
Cash Flow from Assets = 25000+80000
Cash Flow from Assets = 105000
Operating cash flow = Cash Flow from Assets + net capital spending - reduced its net working capital investment
Operating cash flow = 105000+1490000-93000
Operating cash flow = $ 1,502,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.