Test Problems 1 Use the information below to compute the Cash Flow from Assets (
ID: 2735830 • Letter: T
Question
Test Problems 1
Use the information below to compute the Cash Flow from Assets (2 points per step) and Financial Ratios (2 points per step). (Total 18 points)
2015
2014
Balance Sheet:
Current Assets
Current Liabilities
Net Fixed Assets
Long-Term Debt
Common Stock
Income Statement/Other:
Depreciation Expense
EBIT
Interest Expense
Taxes
Net Income
Dividends
$ 4,771
1,532
17,107
10,650
7,000
$ 1,611
3,396
1,282
740
1,374
800
$ 6,127
4,194
17,489
9,800
7,500
Calculate the following Cash Flow from Assets Questions:
1. Operating Cash Flow
2. Net Capital Spending
3. Changes in Net Working Capital
show work please
2015
2014
Balance Sheet:
Current Assets
Current Liabilities
Net Fixed Assets
Long-Term Debt
Common Stock
Income Statement/Other:
Depreciation Expense
EBIT
Interest Expense
Taxes
Net Income
Dividends
$ 4,771
1,532
17,107
10,650
7,000
$ 1,611
3,396
1,282
740
1,374
800
$ 6,127
4,194
17,489
9,800
7,500
Explanation / Answer
Part 1)
The operating cash flow is calculated with the use of following table:
________
Part 2)
The net capital spending is calculated as follows:
________
Part 3)
The changes in net working capital is calculated as follows:
Changes in Net Working Capital = Ending Net Working Capital - Opening Net Working Capital
Net Working Capital = Current Assets - Current Liabilities
________
Using the values provided in the question, we get,
Ending Net Working Capital = 4,771 - 1,532 = $3,239
Opening Net Working Capital = 6,127 - 4,194 = $1,933
Changes in Net Working Capital = 3,239 - 1,933 = $1,306
EBIT 3,396 Add Depreciation Expense 1,611 Less Taxes -740 Operating Cash Flow $4,267Related Questions
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