Zigs Industries had the following operating results for 2011: sales = $30,780; c

Question

Zigs Industries had the following operating results for 2011: sales = $30,780; cost of goods sold = $20,110; depreciation expense = $5,540; interest expense = $2,940; dividends paid = $1,800. At the beginning of the year, net fixed assets were $17,390, current assets were $5,930, and current liabilities were $3,500. At the end of the year, net fixed assets were $21,010, current assets were $7,390, and current liabilities were $4,060. The tax rate for 2011 was 30 percent.

If no new debt was issued during the year, what is the cash flow to creditors?

If no new debt was issued during the year, what is the cash flow to stockholders? (Negative amount should be indicated by a minus sign.)

Explanation / Answer

a) Income Statement Sales $30,780 Cost of goods sold 20,110 Depreciation 5,540 EBIT $5,130 Interest 2,940 Taxable income $2,190 Taxes (30%) $657 Net income $1,533 b. OCF = EBIT + Depreciation

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