Question

Schwert Corp. shows the following information on its 2020 income statement: sales = $275,000; costs = $188,000; other expenses = $7,900; depreciation expense = $15,200; interest expense = $13,600; taxes = $17,605; dividends = $10,500. In addition, you’re told that the firm issued $5,100 in new equity during 2020 and redeemed $3,600 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 stoclkholders?
D. If net fixed assets increased by $22,000 during the year, what was the addition to NWC?

Answer 1

Sry that i could answer the question but i hope u have a great day.

Step-by-step explanation:

Step-by-step explanation:

Answer 2

Answer: See explanation

Step-by-step explanation:

A. What is the 2015 operating cash flow?

This will be:

= EBIT + Depreciation expense - Taxes

= $63900 + $15200 - $17605

= $61495

B. What is the 2015 cash flow to creditors?

This will be:

= Interest expense - Redeemed equity

= $13600 - (-$3600)

= $13600 + $3600

= $17200

C. What is the 2015 cash flow to stoclkholders?

This will be:

= Dividends - Net new equity

= $10500 - $5100

= $5400

D. If net fixed assets increased by $22,000 during the year, what was the addition to NWC

This will be:

= $61495 - $37200 - $22600

= $1695

Note that:

EBIT = Sales - Cost - Other expense - Depreciation

= $275000 - $188000 - $7900 - $15200

= $63900