Question

The Azusa Better, Inc. has compiled the following information: End $4,019 899 143 2,150 402 393 911 1,533 460 1,550 2,609 2,213 514 126 Begin S3,813 1,555 121 1,500 498 306 413 1,516 387 1,700 2,123 2,715 391 305 Sales Long-term debt Interest paid Common stock Accounts receivable Depreciation Cash Inventory Accounts payable Retained earnings Cost of goods sold Net fixed assets Other costs Taxes paid For End year, find the cash flow from assets, the cash flow to creditors and to stockholders Operating cash flow - Change in net working capital - Net capital spending- Cash flow from assets - Cash flow to creditors Addition to retained earnings - Net income - Dividends paid - Cash flow to stockholders Cash flow from assets -

Answer 1

Answer of Part 1:

EBIT = Sales – Cost of Goods Sold – Depreciation
EBIT = $4,019 - $2,609 - $393
EBIT = $1,017

Operating Cash Flow = EBIT + Depreciation – Taxes
Operating Cash Flow = $1,017 + $393 - $126
Operating Cash Flow = $1,284

Answer of Part 2:

Beginning Current Assets = Cash + Accounts Receivable + Inventory
Beginning Current Asset = $413 + $498 + $1,516
Beginning Current Assets = $2,427

Beginning Current Liabilities = Accounts Payable = $387

Beginning NWC = Beginning Current Assets – Beginning Current Liabilities
Beginning NWC = $2,427 - $387
Beginning NWC = $2,040

Ending Current Assets = Cash + Accounts Receivable + Inventory
Ending Current Asset = $911 + $402 + $1,533
Ending Current Assets = $2,846

Ending Current Liabilities = Accounts Payable = $460

Ending NWC = Ending Current Assets – Ending Current Liabilities
Ending NWC = $2,846 - $460
Ending NWC = $2,386

Change in Net Working Capital = Ending NWC – Beginning NWC
Change in Net Working Capital = $2,386 - $2,040
Change in Net Working Capital = $346

Answer of Part 3:

Net Capital Spending = Ending Net Fixed Assets – Beginning Fixed Assets + Depreciation
Net Capital Spending = $2,213 - $2,715 + $393
Net Capital Spending = -$109

Answer of Part 4:

Cash Flow from Assets = Operating Cash Flow – Net Capital Spending – Change in NWC
Cash Flow from Assets = $1,284 + $109 - $346
Cash Flow from Assets = $1,047

Answer of Part 5:

Net Borrowing = Ending long term debt – Beginning long term debt
Net Borrowing = $899 - $1,555
Net Borrowing = -$656

Cash flow from Creditors = Interest Paid – Net new borrowing
Cash flow from Creditors = $143 + $656
Cash flow from creditors = $799