Calculate the Operating Cash Flow for 2014 Rhodes Corporation: December 31: Bala

Question

Calculate the Operating Cash Flow for 2014

Rhodes Corporation: December 31: Balance Sheets 2014 2013 Liabilities and Equity Assets Cash and equivalents Short-term investments Accounts Receivable Inventories 2013 150 Accounts Payable 200 Notes Payable 700 Accruals 600 Current Liabilities 2014 160 200 400 760 300 200 600 300 600 1,7001,650 Long-Term Bonds 2,5002,400Total Liabilities 1,200 1,150 1,3001,250Common Stock 1,000 1,100 1,7601,800 Current Assets Gross Plant and Equipment Accumulated Depreciation Net Plant and Equipment 300 800 1,2401,100 3,0002,900 Retained Earnings 840 Total Common Equity 3,000 2,900 Total Liabilities & Equity Total Assets Income Statement Net Sales Operating Costs excluding depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) Depreciation Amortization Depreciation and Amortization Earnings before interest and taxes (EBIT 2014 1,000.0 700.0 300.0 50.0 0.0 Interest Earnings before taxes (EBT Taxes Net Income 50.0 250.0 50.0 200.0 80.0 120.0 Per Share Data 2014 Stock Price WACC Tax Rate Common Shares Outstanding $100.00 10.00% 40.00% 100

Explanation / Answer

Calculate operating cash flows :

Net income 120 Adjustment to reconcile net income Depreciation 50 Amortization 0 Increase short tem investment (100) Decrease account receivable 100 Decrease account payable (40) Increase accurals 100 Net cash flow from operating activities 230

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