Question

Weiland Co. shows the following information on its 2016 income statement: sales = $162,500; costs = $80,000; other expenses = $3,300; depreciation expense = $9,000; interest expense = $6,500; taxes = $22,295; dividends = $8,150. In addition, you're told that the firm issued $4,500 in new equity during 2016 and redeemed $7,700 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 number, e.g., 32.) Operating cash flow $ 56905

b. What is the 2016 cash flow to creditors? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Cash flow to creditors $ 14200

c. What is the 2016 cash flow to stockholders? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Cash flow to stockholders $ 3650

d. If net fixed assets increased by $21,200 during the year, what was the addition to NWC? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Addition to net working capital $

I don't know how to figure out if net fixed assets increased by 21,200 during the year, what was the addition to NWC

Answer 1

Answer d.

Cash Flow from Assets = Cash Flow to Creditors + Cash Flow to Stockholders
Cash Flow from Assets = $14,200 + $3,650
Cash Flow from Assets = $17,850

Cash Flow from Assets = Operating Cash Flow - Addition to NWC - Increase in Net Fixed Assets
$17,850 = $56,905 - Addition to NWC - $21,200
Addition to NWC = $17,855