3. Cumberland Industries -- Generation of the Cash Flows for 2007 Cumberland Ind

Question

3. Cumberland Industries -- Generation of the Cash Flows for 2007 Cumberland Industries' Income Statement ($ Dollars) 2007 Sales $455,150,000 Operating Costs excluding Depreciation $396,877,500 ------------------------- Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) $58,272,500 Depreciation $7,388,150 Interest Paid $8,575,000 ------------------------- Earnings Before Taxes $42,309,350 Taxes (40%) $16,923,740 ------------------------- Net Income available to Common Stockholders $25,385,610 Cumberland Industries' Statement of Retained Earnings ($ Dollars) Balance of Retained Earnings, Dec. 31, 2006 $38,774,000 Add: Net Income, 2007: $25,385,610 Less: Dividends to Common Stock Shareholders: $12,654,244 ------------------------- Balance of Retained Earnings, Dec. 31, 2007 $51,505,366 Please generate the Statement of Cash Flows for Cumberland Industries. Cumberland Balance Sheet (in Thousands of Dollars) Cash Flows (in Thousands of Dollars) 2006 2007 Operating Investing Financing Cash $74,625 $91,450 Short Term Investments $15,100 $11,400 Accounts Receivable $85,527 $103,365 Inventories $34,982 $38,444 --------------- --------------- Total Current Assets $210,234 $244,659 Net Fixed Assets $42,436 $68,306 --------------- --------------- Total Assets $252,670 $312,965 Accounts Payable $23,109 $30,761 Accruals $22,656 $30,477 Notes Payable $14,217 $16,717 --------------- --------------- Total Current Liabilities $59,982 $77,955 Long-Term Debt $63,914 $76,264 --------------- --------------- Total Liabilites $123,896 $154,219 Common Stock $90,000 $107,241 Retained Earnings $38,774 $51,505 --------------- --------------- Total Common Equity $128,774 $158,746 --------------- --------------- Total Liabilities and Equity $252,670 $312,965 --------------- --------------- --------------- 3. Cumberland Industries -- Generation of the Cash Flows for 2007 Cumberland Industries' Income Statement ($ Dollars) 2007 Sales $455,150,000 Operating Costs excluding Depreciation $396,877,500 ------------------------- Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) $58,272,500 Depreciation $7,388,150 Interest Paid $8,575,000 ------------------------- Earnings Before Taxes $42,309,350 Taxes (40%) $16,923,740 ------------------------- Net Income available to Common Stockholders $25,385,610 Cumberland Industries' Statement of Retained Earnings ($ Dollars) Balance of Retained Earnings, Dec. 31, 2006 $38,774,000 Add: Net Income, 2007: $25,385,610 Less: Dividends to Common Stock Shareholders: $12,654,244 ------------------------- Balance of Retained Earnings, Dec. 31, 2007 $51,505,366 Please generate the Statement of Cash Flows for Cumberland Industries.

Explanation / Answer

particulars Amount (in thousand dollar) Cash balance at beginning 74625 net changes in cashflow 16825 closing cash balance 91450 Cash flow changes particulars Amount (in thousand dollar) Amount (in thousand dollar) Cash Flow from operating Activities net income 25385.61 adjustmen depreciation 7388.15 changes In account receivable -17838 changes in inventory -3462 changes in accounts payable 7652 changes in Accrual 7821 interest expenses 8575 change in notes payable 2500 Total 38021.76 financing Activites interest -8575 dividend -12654.24 long term debt 12350 stock issue 17241 total 8361.756 investment Activites assets -25870 sale of investment 3700 depreciation -7388.51 total -29558.5 Net changes in cashflow 16825.01

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