Use the data from the following financial statements in the popup window,
The company paid interest expense of $17,700 and had an overall
tax rate of 40% for 2017 Find the cash flow for 2017 and break it
into 3 parts:
operating cash flow, capital spending, and change in net working
capital.
What is the cash flow from assets?
Answer:
EBIT = Sales Revenue - Costs of Goods Sold - Fixed Costs -
Selling, General and Administrative Expenses - Depreciation
EBIT = $349,800 - $141,900 - $43,200 - $27,800 - $46,000
EBIT = $90,900
EBT = EBIT - Interest Expense
EBT = $90,900 - $17,700
EBT = $73,200
Taxes = EBT * Tax Rate
Taxes = $73,200 * 40%
Taxes = $29,280
Operating Cash Flow = EBIT + Depreciation - Taxes
Operating Cash Flow = $90,900 + $46,000 - $29,280
Operating Cash Flow = $107,620
Ending Current Assets = Cash + Accounts Receivable +
Inventories
Ending Current Assets = $26,200 + $18,800 + $52,800
Ending Current Assets = $97,800
Ending Current Liabilities = Notes Payable + Accounts
Payable
Ending Current Liabilities = $12,200 + $24,200
Ending Current Liabilities = $36,400
Ending Working Capital = Ending Current Assets – Ending Current
Liabilities
Ending Working Capital = $97,800 - $36,400
Ending Working Capital = $61,400
Beginning Current Assets = Cash + Accounts Receivable +
Inventories
Beginning Current Assets = $15,800 + $28,200 + $47,900
Beginning Current Assets = $91,900
Beginning Current Liabilities = Notes Payable + Accounts
Payable
Beginning Current Liabilities = $13,900 + $19,000
Beginning Current Liabilities = $32,900
Beginning Working Capital = Ending Current Assets – Ending
Current Liabilities
Beginning Working Capital = $91,900 - $32,900
Beginning Working Capital = $59,000
Change in Net Working Capital = Ending Working Capital –
Beginning Working Capital
Change in Net Working Capital = $61,400 - $59,000
Change in Net Working Capital = $2,400
Net Capital Spending = Ending Fixed Assets - Beginning Fixed
Assets
Net Capital Spending = $448,000 - $368,100
Net Capital Spending = $79,900
Cash Flow from Assets = Operating Cash Flow - Net Capital
Spending - Change in Net Working Capital
Cash Flow from Assets = $107,620 - $79,900 - $2,400
Cash Flow from Assets = -$25,320
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