Question

Weiland Co. shows the following information on its 2016 income statement sales $160,500 costs $80.400, other expenses $3,700; depreciation expense $9,400 interest expense $6,900, taxes $21,035, dividends $7,950. In addition, youre told that the frm issued $4,100 in new ecuity during 2016 and redeemed $6,900 in outstanding long-term debt a. What is the 2016 operating cash flow? (Do not round intermediate calculations and round your answer to the nearest whole sumber, e.g. 32.) Operating cash flow b. What is the 2016 cash flow to creditors? (Do not round intermediate calculations and round your answer to the nearest whole number,g,32) Cash flow to creditors e. What is the 2016 cash fow to stockholders? (Do not round intermediate calculations and round your answer to the nearest whole number,e.g 32) Cash flow to stockholders d. If net fxed assets increased by $21,000 during the year, what was the addtion to NWC? (Do not round intermediate calculations and round your answer to the nearest whole number,.932.) Addtion to net working capital $

Answer 1

Answer a)
		operating cash flow = Income after tax +Interest + depreciation
		Income after tax =
		Sales	160500
	Less	Cost	80400
	Less	Other expenses	3700
	Less	Depreciation expenses	9400
	Less	Interest expenses	6900
	Less	tax	21035
		Income after tax	39065
		Operating cash flow
		Income after tax	39065
	Add	Depreciation expenses	9400
	Add	Interest expenses	6900
		Operating cash flow	55365
Answer b)
		Cash flow to creditor = Interest paid + Debt redeeption
		Cash flow to creditor =	=6900+6900
		Cash flow to creditor =	13800
Answer c)
		Cash flow to stockholder
		Cash flow to stockholder = Dividend paid - new equity issue
		Cash flow to stockholder	=7950-4100
		Cash flow to stockholder	3850
Answer d)
		Change in NWC
		Net capital spending = depreciation+increase in FA
		Net capital spend =	9400+21000
		Net capital spend =	30400
		Cash flow from assets=cash flow to creditors+cash flow to stockholders
		Cash flow from asset	=13800+3850
		Cash flow from asset (CFFA)	17650
		CFFA=OCF-Change in NWC-net capital spending
		=17650=55365-Change in NWC-30400
		Change in NWC =	=55365-30400-17650
		Change in NWC =	7315