You are researching Time Manufacturing and have found the following accounting s

Question

You are researching Time Manufacturing and have found the following accounting statement of cash flows for the most recent year. You also know that the company paid $99.7 million in current taxes and had an interest expense of $49.7 million.

  

1. Calculate the operating cash flow. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10.2 million would be entered as 10.2. A negative answer should be indicated by a minus sign. Round your answer to one decimal place, e.g., 32.1.)

Operating cash flow             $

2. Calculate the net capital spending. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10.2 million would be entered as 10.2. A negative answer should be indicated by a minus sign. Round your answer to one decimal place, e.g., 32.1.)

Net capital spending             $

3. Calculate the change in net working capital. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10.2 million would be entered as 10.2. A negative answer should be indicated by a minus sign. Round your answer to one decimal place, e.g., 32.1.)

Change in net working capital             $

4. Calculate the cash flow to creditors. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10.2 million would be entered as 10.2. A negative answer should be indicated by a minus sign. Round your answer to one decimal place, e.g., 32.1.)

Cash flow to creditors             $

5. Calculate the cash flow to stockholders. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10 million would be entered as 10. A negative answer should be indicated by a minus sign. Round your answer to nearest whole dollar amount, e.g., 32.)

Cash flow to stockholders             $

TIME MANUFACTURING
Statement of Cash Flows
($ in millions) Operations Net income $ 190.0 Depreciation 95.7 Deferred taxes 20.7 Changes in assets and liabilities   Accounts receivable –19.7   Inventories 23.7   Accounts payable 18.7   Accrued expenses –10.7   Other 4.7 Total cash flow from operations $ 323.1 Investing activities Acquisition of fixed assets –$ 198.0 Sale of fixed assets 24.7 Total cash flow from investing activities –$ 173.3 Financing activities Retirement of long-term debt –$ 179.0 Proceeds from long-term debt sales 133.0 Dividends –103.0 Repurchase of stock –30.0 Proceeds from new stock issue 61.0 Total cash flow from financing activities –$ 118.0 Change in cash (on balance sheet) $ 31.8

Explanation / Answer

1) Operating cash flow             = Total cash flow from operations (Given) = $ 323.10

2) Net capital spending             = Purchase of Fixed Asset - Sale of Fixed Asset = - 198 + 24.70 = -173.30

3) Change in net working capital = Changes in current assets and liabilities = -19.7 +23.7+18.7-10.7+4.7 = 16.7

4) Cash flow to creditors             = Changes in Accounts payable = $ 18.7

5) Cash flow to stockholders          = Proceeds from new stock Issue - Repurchase of stock - Dividend paid = 61-30-103 = -72

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