Question

Use the following information for Taco Swell, Inc., (assume the tax rate is 30 percent): 2014 2015 Sales Depreciation Cost of goods sold Other expenses interest Cash Accounts receivable Short-term notes payable Long-term debt Net fixed assets Accounts payable Inventory Dividends $19,573 $17.736 1,821 1896 4,779 4,867 904 1,026 875 1.006 6,307 6,946 8,200 9,907 1,307 20,800 25,036 51,240 58,030 4,640 5,124 14,555 15,448 1,750 1,778 1,330 For 2015, calculate the cash flow from assets, cash flow to creditors, and cash flow to stockholders (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g. 32.16.) Cash flow from assets Cash flow to creditors Cash flow to stockholders

Answer 1

Balance Sheet as of Dec. 31 2014 2015 Assets Cash Accounts receivable Inventory Current a ssets Net fixed assets Total assets Liabilities and Equity Accounts payable Notes payable Current liabilities Long-term debt Owner's equity Total liabilities and equity 6307.00 8200.00 14555.00 29062.00 51240.00 80302.00 6946.00 9907.00 15448.00 32301.00 58030.00 90331.00 4640.00 1330.00 5970.00 20800.0025036.00 53532.00 80302.00 5124.00 1307.00 6431.00 58864.00 90331.00 Income Statement for 2014 19573.00 4779.00 1026.00 1821.00 11947.00 875.00 11072.00 3321.60 7750.40 1750.00 6000.40 2015 17736.00 4867.00 904.00 1896.00 10069.00 1006.00 9063.00 2718.90 6344.10 1778.00 4566.10 Sales Cost of goods sold Other expenses Depreciation EBIT Interest EBT Taxes (30%) Net income Dividends Addition to retained earnings

Answer a.

Operating Cash Flow = EBIT + Depreciation - Taxes
Operating Cash Flow = $10,069 + $1,896 - $2,718.90
Operating Cash Flow = $9,246.10

Change in Net Working Capital = Net Working Capital, 2016 - Net Working Capital, 2015
Change in Net Working Capital = (Current Assets, 2015 - Current Liabilities, 2014) - (Current Assets, 2015 - Current Liabilities, 2014)
Change in Net Working Capital = ($32,301 - $6,431) - ($29,062 - $5,970)
Change in Net Working Capital = $2,778

Net Capital Spending = Net Fixed Assets, 2015 + Depreciation - Net Fixed Assets, 2014
Net Capital Spending = $58,030 + $1,896 - $51,240
Net Capital Spending = $8,686

Cash Flow from Assets = Operating Cash Flow - Net Capital Spending - Change in Net Working Capital
Cash Flow from Assets = $9,246.10 - $8,686 - $2,778
Cash Flow from Assets = -$2,217.90

Answer b.

Net New Long-term Debt = Long-term Debt, 2015 - Long-term Debt, 2014
Net New Long-term Debt = $25,036 - $20,800
Net New Long-term Debt = $4,236

Cash Flow to Creditors = Interest Paid - Net New Long-term Debt
Cash Flow to Creditors = $1,006 - $4,236
Cash Flow to Creditors = -$3,230

Answer c.

Cash Flow from Assets = Cash Flow to Creditors + Cash Flow to Stockholders
-$2,217.90 = -$3,230 + Cash Flow to Stockholders
Cash Flow to Stockholders = $1,012.10