The 2017 balance sheet of Kerber\'s Tennis Shop, Inc., showed long-term debt of
ID: 2817001 • Letter: T
Question
The 2017 balance sheet of Kerber's Tennis Shop, Inc., showed long-term debt of $5.4 million, and the 2018 balance sheet showed long-term debt of $5.6 million. The 2018 income statement showed an interest expense of $175,000. During 2018, 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 2018 was $1,390,000, and that the firm reduced its net working capital investment by $73,000 What was the firm's 2018 operating cash flow, or OCF? (Enter your answer in dollars not millions of dollars, e.g., 1,234,567.) Operating cash flowExplanation / Answer
Cash Flow from Assets = Cash Flow to Creditors + Cash Flow to Stockholders
Cash Flow from Assets = -$25,000 + $80,000
Cash Flow from Assets = $55,000
Cash Flow from Assets = Operating Cash Flow - Net Capital Spending - Change in Net Working Capital Investment
$55,000 = Operating Cash Flow - $1,390,000 - (-$73,000)
Operating Cash Flow = $1,372,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.