Calculate the operating cash flow. Calculate the change in net working capital.
ID: 2731886 • Letter: C
Question
Calculate the operating cash flow.
Calculate the change in net working capital.
Calculate the net capital spending.
Calculate the cash flow from assets. (Do not include the dollar sign ($). Negative amount should be indicated by a minus sign.)
Calculate the cash flow to creditors.
Calculate the cash flow to stockholders. (Negative amount should be indicated by a minus sign.)
Graffiti Advertising, Inc., reported the following financial statements for the last two years. (Enter your answer as directed, but do not round intermediate calculations.)Explanation / Answer
Requirement 1)
Operating Cash flow = EBIT + Depreciation - Taxes
= 116936 + 54566 - 38968
= $ 132534
Requirement 2)
Net working capital for year ending on 31 Decemeber 2014 = 58259 - 26998 = $ 31261
Net working capital for year ending on 31 Decemeber 2013 = 46208 - 23992 = $ 22216
Change in net working = Current year net working capital - Previous year net working capital
= 31261 - 22216
= $ 9045 [Additions to working capital in year 2014]
Requirement 3)
Net Capital Spending = Ending fixed assets - Beginning fixed assets + Depreciation
= 406301 - 344726 + 54566
= $ 116141
Requirement 4)
Cash flow from assets = Operating cash flow - Net capital spending - Addition to working capital
= 132534 - 116141 - 9045
= $ 7348
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