Cash Flow from assets
Cash Flow from assets = Cash Flow to Creditors + Cash Flow to Stockholders
= $50,000 + $90,000
= $140,000
Operating Cash Flow
Operating Cash Flow using the Cash Flow from assets Equation
We know, Cash flow from assets = Operating Cash flows – Change in Net Working capital – Net Capital Spending
$140,000 = Operating cash flow – (-$63,000) - $1,340,000
Operating cash flow = $140,000 - $63,000 + $1,340,000
Operating cash flow = $1,417,000
“Hence, the firm's 2018 operating cash flow, or OCF will be $1,417,000”
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The 2017 balance sheet of Kerber's Tennis Shop, Inc., showed long-term debt of $6.3 million, and the 2018 balance sheet showed long-term debt of $6.5 million. The 2018 income statement showed an interest expense of $220,000. During 2018, the company had a cash flow to creditors of $20,000 and the cash flow to stockholders for the year was $75,000. Suppose you also know that the firm’s net capital spending for 2018 was $1,480,000, and that the firm reduced its net...
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