Balance Sheet as of End of Fiscal Year (Figures in Millions of USD) 2013 2014 As

Question

Balance Sheet as of End of Fiscal Year (Figures in Millions of USD) 2013 2014 Assets Cash & Mkt. Securities 40 65 Other Current Assets 50 75 Net Fixed Assets 800 900 Liabilities Current Liabilities 50 60 Long-Term Debt 600 700 Income Statement for Fiscal Year 2014 (Figures in Millions of USD) Revenue 1,950 Cost of Goods Sold 1,030 Depreciation 350 Interest Expense 240 8. Assume South Sea Baubles, Inc. (the company in the prior question) neither issued nor retired any shares in 2014 and that its current portion of long-term debt remained unchanged in 2014 relative to the prior year. Construct SSB’s cash flow statement and answer the following: a) What were SSB’s net cash flows from operations for 2014? b) What were SSM’s net cash flows from investment activities in 2014? c) What were SSB’s net cash flows from financing activities in 2014?

Explanation / Answer

Cashflow from Operations = Net Income + Depreciation - Chnage in current assets + Change in current liabilities

=940 -25 +10'

=925

Cashflow from finaciang = 700-600 =100

Cashflow from investing =

800 +x -350=900

x = 1250- 800

= 450 = cashflows from investing

2013 2014 Cash & Mkt Securities 40 65 Other current Assets 50 75 Net fixed Assets 800 900 Current Liabilities 50 60 Long Term Dedbt 600 700 Income Statement Revenue 1950 COGS 1030 Depreciation 350 Interes Expense 240 Profit 590

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