Question

The table below contains data on Fincorp Inc. The balance sheet items correspond to values at year-end 2015 and 2016, while the income statement items correspond to revenues or expenses during the year ending in either 2015 or 2016. All values are in thousands of dollars. Revenue Cost of goods sold Depreciation Inventories Administrative expenses Interest expense Federal and state taxes* Accounts payable Accounts receivable Net fixed assetst Long-term debt Notes payable Dividends paid Cash and marketable securities 2015 $4,000 1,600 500 300 500 150 400 300 400 5,000 2,000 1,000 410 800 2016 $4,100 1,700 520 350 550 150 420 350 450 5,800 2,400 600 410 300 * Taxes are paid in their entirety in the year that the tax obligation is incurred. T Net fixed assets are fixed assets net of accumulated depreciation since the asset was installed. Construct a statement of cash flows for Fincorp for 2016. (Negative amounts should be indicated by a minus sign.)

Answer 1

Cash flow from operating activities
Revenue	4,100.00
Cost of Goods sold	1,700.00
Gross Profit	2,400.00
Administrative expenses	550.00
Profit before tax and interest	1,850.00
Working Capital changes
(Increase)/Decrease in Accounts Receivable	-50.00
(Increase)/Decrease in Inventories	-50.00
Increase/(Decrease) in Notes payable	-400.00
Increase/(Decrease) in Accounts payable	50.00
Cash generated from operations	1,400.00
Income tax paid	-420.00
Net cash generated from operations	980.00
Cash flows from investing activities
Purchase of fixed assets	-1,320.00
Net cash used in investing activities	-1,320.00
Cash flows from financing activities
Interest paid during the year	-150.00
Long term debt availed	400.00
Dividend paid	-410.00
Net cash used in financing activities	-160.00
Net increase in cash and cash equivalents	-500.00
Cash and cash equivalents at beginning of period	800.00
Cash and cash equivalents at end of period	300.00