I need answer for Requirement 5 and 6. Calculate the operating cash flow. Calcul
ID: 2731897 • Letter: I
Question
I need answer for Requirement 5 and 6.
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
1. Operating cash flow = EBIT - (tax rate *EBIT) + depreciation
Tax rate = taxes/EBT = 38,968/97,420 = 40%
Thus OCF = 116,936 - (40% of 116,936) + 54,566
= $124,727.60
2. Changes in net working capital: Net Working capital = Current assets - current liabilities
Changes in net working capital = net working capital in 2014 - net working capital in 2013
= (58,259 - 26,998) - (46,208 - 23,992)
= 31,261 - 22,216
= $9,045
3. Net capital spending = ending fixed assets - beginning fixed assets + depreciation for the year
= 406,301 - 344,726 + 54,566
= $116,141
4. Cash flow from assets = operating cash flow - net capital spending - changes in net working capital
$124,727.60 - $116,141 - $9,045
= -458.40
5. cash flow to creditors = interest paid - (ending long term debt - beginning long term debt)
= 19,516 - (153,000 - 136,000)
= 19,516 - 17,000
= 2,516
6. cash flow to stockholders = dividends paid - net new equity raised
10,600 - (284,562 - 230,942)
= - 43,020
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