Final answer:
Stackhouse Industries had a net income of $7,458.75 for 2023. The operating cash flow was $13,168.75, and the cash flow from assets was -$2,706.25 for the year.
Step-by-step explanation:
To calculate net income for Stackhouse Industries for the year 2023, we need to use the following formula:
Net Income = Sales - Cost of Goods Sold - Depreciation Expense - Interest Expense - Taxes
From the data given:
- Sales = $54,070
- Cost of Goods Sold = $37,150
- Depreciation Expense = $5,710
- Interest Expense = $1,265
To find the taxes, we calculate the earnings before taxes (EBT), which is Sales - Cost of Goods Sold - Depreciation Expense - Interest Expense, and then apply the tax rate.
EBT = $54,070 - $37,150 - $5,710 - $1,265 = $9,945
Taxes = EBT * Tax Rate = $9,945 * 25% = $2,486.25
Therefore, Net Income = $9,945 - $2,486.25 = $7,458.75
To find the operating cash flow (OCF) for 2023, we use the formula:
OCF = Net Income + Depreciation Expense
OCF = $7,458.75 + $5,710 = $13,168.75
Finally, to determine the cash flow from assets for 2023:
Cash Flow from Assets = OCF - Net Capital Spending - Change in Net Working Capital
Net Capital Spending is the change in net fixed assets plus depreciation: Net Capital Spending = (Ending Net Fixed Assets - Beginning Net Fixed Assets) + Depreciation = ($42,780 - $33,120) + $5,710 = $15,370
Change in Net Working Capital = (Ending Current Assets - Ending Current Liabilities) - (Beginning Current Assets - Beginning Current Liabilities) = ($9,335 - $5,830) - ($8,260 - $5,525) = $505
Cash Flow from Assets = $13,168.75 - $15,370 - $505 = -$2,706.25