Question

Given the following information about Heyman Ltd for the year ended 2018 Sales Cost of goods sold Depreciation expense Interest expense $ 78,000 32,500 2,500 1000 Net fixed assets Current assets Current liabilities Beginning of the year $ 108,000 6,500 3,300 End of the year $ 120,500 7.700 4,100 The tax rate for the year was 40%.

Answer 1

A B D E F G H I nm + n 00 Sales COGS Dep Interest Profit before tax Tax@40% Net income Add: Dep Add: Interest Operating Cash flow before WC changes Increase in NWC 1 Operating Cash flow 78000 32500 2500 1000 42000 16800 25200 2500 1000 28700 400 28300 10 11 12 13 14 Cash flow from asset 12900 15 2 Closing balance Dep Opening Balance NCS 120500 2500 108000 15000 Cash flow to creditors 2300 Beg Cash flow to stock holders 10600 16 17 18 19 20 21 22 23 24 25 26 27 3 Current assets Current Liabilities NWC 6500 3300 3200 END 7700 4100 3600 increase in working capital 400

D E F Sales COGS Dep Interest Profit before tax Tax@40% Net income Add: Dep Add: Interest Operating Cash flow before WC changes Increase in NWC 1 Operating Cash flow 78000 32500 2500 1000 =D2-SUM(D3:05) =D6*0.4 =D6-D7 =D4 =D5 =SUM(D8:D10) =D24 =D11-012 9 10 11 12 13 14 Cash flow from asset =D13-D18-D24 15 2 Closing balance Dep Opening Balance NCS 120500 =D9 108000 =D15+D16-D17 16 17 18 19 Cash flow to creditors =D10+1300 Beg Cash flow to stock holders =114-117 20 3 Current assets Current Liabilities NWC 21 22 23 END 7700 4100 =E20-E21 6500 3300 =D20-D21 24 increase in working capital =E22-D22 25 26 27 28