Calculate the operating cash flow. Calculate the change in net working capital.

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.)

2014 Income Statement   Sales $ 570,200   Costs of goods sold 273,975   Selling & administrative 124,723     Depreciation 54,566   EBIT $ 116,936   Interest 19,516     EBT $ 97,420   Taxes 38,968   Net income $   58,452     Dividends $ 10,600   Addition to retained earnings $ 47,852

Explanation / Answer

Answer:1

Operating Cash Flow = NOPAT + depreciation

where, Net Operating Profit After Tax (NOPAT) = EBIT (1 – tax rate)

NOPAT=116,936(1-0.40)

=$70161.6

Operating cash Flow=$70161.6+54,566

=$124727.6

Answer:2 Change in net working capital=2014 Working capital-2013 Working capital

=$31261-$22216

=$9045

2014 Working capital=Current assets-Current liabilities

=58,259-26,998

=$31261

2013 Working capital=Current assets-Current liabilities

=46,208-23,992

=$22216

Answer:3 Net capital spending = ending fixed assets – beginning fixed assets + depreciation

=406,301-344,726+54,566

=116141

Answer:4 CFFA = Operating cash flow – net capital spending – changes in net working capital

=$124727.6-116141-9045

=-458.4

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