The 2008 balance sheet of Maria\'s Tennis Shop, Inc., showed $2.7 million in lon
ID: 2659537 • Letter: T
Question
The 2008 balance sheet of Maria's Tennis Shop, Inc., showed $2.7 million in long-term debt, $710,000 in the common stock account, and $6.3 million in the additional paid-in surplus account. The 2009 balance sheet showed $3.8 million, $985,000, and $7.9 million in the same three accounts, respectively. The 2009 income statement showed an interest expense of $370,000. The company paid out $630,000 in cash dividends during 2009. If the firm's net capital spending for 2009 was $690,000, and the firm reduced its net working capital investment by $185,000, the firm's 2009 operating cash flow, or OCF?
The 2008 balance sheet of Maria's Tennis Shop, Inc., showed $2.7 million in long-term debt, $710,000 in the common stock account, and $6.3 million in the additional paid-in surplus account. The 2009 balance sheet showed $3.8 million, $985,000, and $7.9 million in the same three accounts, respectively. The 2009 income statement showed an interest expense of $370,000. The company paid out $630,000 in cash dividends during 2009. If the firm's net capital spending for 2009 was $690,000, and the firm reduced its net working capital investment by $185,000, the firm's 2009 operating cash flow, or OCF?
Explanation / Answer
Calculate the Operating Cash flow:
To calculate the operating cash flow, we first have to find out the Cash flow to creditors and cash flow to stockholders and then cash flow form assets.
Cash flow to creditors = Interest paid
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