Problem

Cash Flows Ritter Corporation’s accountants prepared the following financial statements fo...

Cash Flows Ritter Corporation’s accountants prepared the following financial statements for year-end 2010:

a.Explain the change in cash during 2010.


b.Determine the change in net working capital in 2010.


c.Determine the cash flow generated by the firm’s assets during 2010.

RITTER CORPORATION

Income Statement 2010

Revenue

$600

Expenses

405

Depreciation

90

Net income

$105

Dividends

$ 45

RITTER CORPORATION

Balance Sheets December 31

 

2010

2009

Assets

 

 

Cash

$ 50

$ 35

Other current assets

155

140

Net fixed assets

340

290

Total assets

$ 545

$465

Liabilities and Equity

 

 

Accounts payable

$ 85

$ 95

Long-term debt

135

105

Stockholders’ equity

325

265

Total liabilities and equity

$545

$465

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