Question

Calculating Total Cash Flows 11.041 Volbeat Corp. shows the following information on its 2015 $267000; costs $148,000; other expenses $8,200; depreciation expense $17,600; interest expense $12,400; taxes $32,620; dividends 515,500. In income statement sales addition, you're told that the firm issued $6,400 in new equity during 2015 and redeemed $4,900 in outstanding long-term debt. a. What is the 2015 operating cash flow? b. What is the 2015 cash flow to creditors? c. What is the 2015 cash flow to stockholders? For part D of this question we willl change it to say "What is the 2015 cash flow from assets?" (Hint: Answer for Question d can be easily obtained, based on your answers for Questions b and c.)

***The dividend amount is $15,500

Answer 1

Answer a.

EBIT = Sales - Costs - Other Expenses - Depreciation
EBIT = $267,000 - $148,000 - $8,200 - $17,600
EBIT = $93,200

Operating Cash Flow = EBIT + Depreciation - Taxes
Operating Cash Flow = $93,200 + $17,600 - $32,620
Operating Cash Flow = $78,180

Answer b.

Cash Flow to Creditors = Interest Expense - Net New Long-term Debt
Cash Flow to Creditors = $12,400 - (-$4,900)
Cash Flow to Creditors = $17,300

Answer c.

Cash Flow to Stockholders = Dividends - Net New Equity
Cash Flow to Stockholders = $515,500 - $6,400
Cash Flow to Stockholders = $509,100

Answer d.

Cash Flow from Assets = Cash Flow to Creditors + Cash Flow to Stockholders
Cash Flow from Assets = $17,300 + $509,100
Cash Flow from Assets = $526,400