Question

Volbeat Corp. shows the following information on its 2015 income statement: sales = $231,000; costs = $135,000; other expenses = $7,900; depreciation expense = $14,400; interest expense = $14,300; taxes = $20,790; dividends = $11,500. In addition, you’re told that the firm issued $5,800 in new equity during 2015 and redeemed $4,300 in outstanding long-term debt.

What is the 2015 operating cash flow?
Operating cash flow What is the 2015 cash flow to creditors?
Cash flow to creditors What is the 2015 cash flow to stockholders?
Cash flow to stockholders If net fixed assets increased by $28,000 during the year, what was the addition to NWC?

Answer 1

A.$67,340

B.$18,600

C.$5,700

D. Net working capital increase by $28,000.

Step-by-step explanation:

A. Operating cash flow = EBIT + depreciationEBIT = sales – cost – other expenses - depreciation

= $231,000 -$135,000 – $7,900 -$14,400

=$73,700

Operating cash flow = $73,700+ $14,400 -$20,790= $67,340

B. cash flow to creditor = redeemed long term debt + interest= $4,300 + $14,300= $18,600

C. cash flow to stock holder = dividends – issued equity

= $11,500 – $5,800 = $5,700

D. Net working capital increase by $28,000.

As net working capital = current assets – current liability and fixed asset is a part of current asset.