Assignment instructions are as follows Use the information in the provided Incom

ID: 2536102 • Letter: A

Question

Assignment instructions are as follows Use the information in the provided Income Statement and Balance Sheet to create the 2017 Statement of Cash Flows for H&K; Inc. This should be created on the appropriate Tab of the Excel Workbook Template provided on BlackBoard 1. 2. Formulas: Use Excel to setup the Statement of Cash Flows by linking the values from the Income Statement and the Balance Sheet. a. b. Use Excel formulas to calculate all totals and sub-totals. 3. Complete the ratio calculations for 2017 on the appropriate tab using the Income Statement and Balance Sheet. All ratios should be linked back to your financial statements Save you roject3-Welch.xls) Upload the completed assignment to BlackBoard using the link provided r Excel workbook Proiect3-your last name. (For example: P 4. 5. GRADING RUBRIC: FORMATTING (15%) Statement of Cash Flow should be formatted and easy to read/follow. This includes: . Properly underlined subtotals and grand totals . Consistency in formatting (i.e. if decimals are used, they should be consistent. Are dollar signs used consistently?) ACCURACY/COMPLETENESS (25%) The Statement of cash flows and ratios were completed by linking the cells back to the financial statements STATEMENT OF CASH FLOWS (30%) All sub-totals and totals are accurately calculated (using Excel formulas). All sections of the statement are included and correctly subtotaled. The Statement matches the change in cash from the Balance Sheet RATIOS (30%) All ratios are accurately calculated (using Excel formulas)

Explanation / Answer

Cash Flow Statement For H&K Inc for the year 2017

Particulars

Cash From Operations

Net Profit as per Income Statement

$4,784

Add:Non – Cash Items (i.e items that do not result in outflow of cash)

Depreciation

$2,015

Amortization

$100

Increase in Accounts Payable

$176

Increase in Accrued Liabilities

$42

$2,333

$7,117

Less:

Gain on sale of Property & Equip.

$92

Increase in Accounts Receivable

$105

Increase in Current Assets

$19

Decrease in Income Tax Payable

$21

Increase in Merchandise Inventories

$291

$528

Inflow of Cash from operations

$6,589

Cash From Investing Activities

Sale of Equipment

$892

Less: Purchase of Equipment

$5,150

Outflow of cash from investing activities

-$4,258

Cash From Financing Activities

Stock issued during the year

$616

Less: Treasury Stock bought during the year

$2,054

Add: Additional debt raised during the year

$300

Less:Payment of debt obligations

$425

Less: Dividends paid during the year

$35

Outflow of Cash from Financing activities

-$1,598

Net Cash Inflow During the year

$733

Add: Cash and Cash equivalents at the beginning of the period

$1,298

Cash & Cash Equivalents at the end of the period

$2,031

Current Ratio = Current Assets / Current liabilities

= $7,574/$1,283 = 5.90

Acid Test Ratio = (Cash+Accounts Receivable + Short Term Investments)/Current Liabilities

=($2,031+$1,095)/$1,283 = 2.44

AR Turnover (Accounts Receivable Turnover Ratio)

= Net Credit Sales / Average Accounts Receivable

=$29,873/$1,042.50

=$28.66

Day Sales Uncollected = (Accounts receivable/Net Annual Credit Sales)x 365

= ($1,095/$29,873)x365 = 13.38 days

Inventory Turnover = COGS /Average Inventory

=$16,780/ (($3,982+$4,273)/2)

=4.065

Day Sales in Inventory = (Inventory/Cost of Sales) x 365

= ($4,273/$16,780) x 365

= 92.95 days

Total Asset Turnover = Net Sales / Average Total Assets

= 29,873/((15,491+18,874)/2)

= 1.74

Debt to Equity Ratio = 1 + Debt/Equity

= 1 + $3,449/$14,142

=1 + 0.24 = 1.24

Times Interest Earned = EBIT/Interest

= ($6,205+$138)/$138

= 45.96

Profit Margin = Net Income / Sales = $4,784/29,873 = 16.01%

Return on Total Assets = EBIT / Total Net Assets

= ($6,205 + $138) /$18,874

= 0.34

Return on stockholder’s Equity = Net Income/Stockholder’s Equity

= $4,784/$14,142