Titan Football Manufacturing had the following operating results for 2014: sales

Question

Titan Football Manufacturing had the following operating results for 2014: sales = $19,860; cost of goods sold = $13,900; depreciation expense = $2,290; interest expense = $305; dividends paid = $630. At the beginning of the year, net fixed assets were $17,800, current assets were $3,020, and current liabilities were $1,990. At the end of the year, net fixed assets were $21,140, current assets were $3,440, and current liabilities were $2,080. The tax rate for 2014 was 40 percent.

What is the cash flow from assets during 2014

Assume no new debt was issued during the year.

What is the cash flow to creditors during 2014?

What is the cash flow to stockholders during 2014?

Assume no new debt was issued during the year.

What is the cash flow to creditors during 2014?

What is the cash flow to stockholders during 2014?

Explanation / Answer

Solution:

Cash flow from Assets = Operating Cash Flow - Capital Spending - Additions to Net Working Capital

= $ 4,614 - $ 5,630 - $ 330

= - $ 1,346

Cash flow to Creditors = Interest Paid - Net New Brrowing

                                    = $ 305 - $ 0

                                   = $ 305

Cash Paid To shareholders = Dividends

                                               = $ 630

Operating Cash Flow $ Sales            19,860 Less: Cost Of Goods Sold          13,900 Less: Depreciation            2,290 Less: Interest                305 Net Income            3,365 Less: Taxes ( 40 % )            1,346 Income After Tax            2,019 Income After Tax            2,019 Add: Depreciation            2,290 Add: Interest                305 Operating Cash Flow            4,614

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