Question

Square Hammer Corp. shows the following information on its 2018 income statement: Sales = $227,000; Costs = $129,000; Other expenses = $7,900; Depreciation expense $14,200: Interest expense = $13,700; Taxes = $21,770; Dividends = $10,500. In addition, you're told that the firm issued $5,200 in new equity during 2018 and redeemed $3,700 in outstanding long-term debt. a. What is the 2018 operating cash flow? (Do not round intermediate calculations.) b. What is the 2018 cash flow to creditors? (Do not round intermediate calculations.) c. What is the 2018 cash flow to stockholders? (Do not round intermediate calculations.) d. If net fixed assets increased by $30,000 during the year, what was the addition to NWC? (Do not round intermediate calculations.) a. Operating cash flow b. Cash flow to creditors c. Cash flow to stockholders d. Addition to NWC

Answer 1

Solution: as operating cash flad - Sales flad - Sales - costs-other expenses-tares 227 000 - 129000 - 7900 -21770 $ 68330 b) cash flow to creditors = Interest paid-Net new bearoning 13700 - 63700) $11400 (C) Cash flow to stock holders = Dividend paid- Net new equity raised 10500 - 5200 -$5300

ce) cash flow from assets - operating cash flow change in Nwe - Net capital spending Net capital spending = 14200 + 30000 =44200 cash flow from assets = 174oot 5300 - 22700 operating cash flow - 68330 Submit values in ego we get change in Nwe = 68330- 44200-22700 = $1430