Calculating Total Cash Flows Schwert Corp. shows the following information on it

Question

      
      Calculating Total Cash Flows Schwert Corp. shows the following information on its 2012 income statement: sales = $185,000; costs = $98,000; other expenses = $6,700; depreciation expense = $16,500; interest expense = $9,000; taxes = $19,180; dividends = $9,500. In addition, you're told that the firm issued $7,550 in new equity during 2012 and redeemed $7,100 in outstanding long-term debt.
     
       
         
            a.
         
          What is the 2012 operating cash flow?
       
       
         
            b.
         
          What is the 2012 cash flow to creditors?
       
       
         
            c.
         
          What is the 2012 cash flow to stockholders?
       
       
         
            d.
          
         If net fixed assets increased by $26,100 during the year, what was the addition to net working capital (NWC)?

Explanation / Answer

A) CFO = EBIT + dep - taxes

EBIT = sales - cost - other expenses - deprecession

= 185000 - 98000 -6700 - 16500 = 63800

CFO = 63800 + 16500 - 19180 = 61120

B) cash flow to creditor = reedemed long term debt + interest

= 7100 + 9000 = 16100

C) cash flow to stockholder =dividends - issued equity

= 9500 - 7550 = 1950

D) NWC increases by 26100 .As NWC = current assets - current liability and fixed asset is a part of current asset

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