Type your question here Schwert Corp. shows the following information on its 201
ID: 2702747 • Letter: T
Question
Type your question here
Schwert Corp. shows the following information on its 2012 income statement: sales= $251,000;cost= $156,000; other expenses= $7,900; depreciation expense = $18,400; interest expense= $14,400; taxes = $19,005; dividends = $11,500. In addition, you're told that the firm issued $5,900 in new equity during 2012 and redeemed dividends $4,400 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? If net fixed assets increased by $25,000 during the year, what was the addition to net working capital (NWC)?<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Explanation / Answer
A) CFO = EBIT + dep - taxes
EBIT = sales - cost - other expenses - deprecession
= 251000 - 156000 -7900 - 18400 = 68700
CFO = 68700 + 18400 - 19005 = 68095
B) cash flow to creditor = reedemed long term debt + interest
= 4400 + 14,400 = 18800
C) cash flow to stockholder =dividends - issued equity
= 11500 - 5900 = 5600
D)NWC = current assets - current liability and fixed asset is a part of current asset
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