Schwert Corp. shows the following information on its 2012 income statement: sale

Question

Schwert Corp. shows the following information on its 2012 income statement: sales = $255,000; costs = $156,000; other expenses = $7,900; depreciation expense = $15,600; interest expense = $14,800; taxes = $21,245; dividends = $12,000. In addition, you?re told that the firm issued $6,300 in new equity during 2012 and redeemed $4,800 in outstanding long-term debt. (Do not round intermediate calculations.) a. What is the 2012 operating cash flow? Operating cash flow $ b. What is the 2012 cash flow to creditors? Cash flow to creditors $ c. What is the 2012 cash flow to stockholders? Cash flow to stockholders $ d. If net fixed assets increased by $28,000 during the year, what was the addition to net working capital (NWC)? Addition to NWC $

Explanation / Answer

a) Operating cash flow = 255000 - 156000 - 7900 - 21245 = 69855

b) Cash flow to creditors = 6300 - 4800 + 69855 - 14800 - 12000 = 44,555

c) Cash flow to stockholders = 12000 - 6300 = 5700

d) Addition to NWC = 28000 + 15600 - 44555 = -955

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