The following information is for United Enterprises for 2009: Dividends paid $12
ID: 2744269 • Letter: T
Question
The following information is for United Enterprises for 2009:
Dividends paid $12,000
Interest paid $21,300 Sales $139,700 Costs $101,400 Depreciation expense was $10,500.
Tax rate 34 % Increase in net fixed assets $34,900
Net working capital, Beg. of year $27,420
Net working capital, End of year $35,810 Increase in Long term Debt $29,600
What is the amount of the operating cash flow?
What is the Net Capital Spending?
What is the Change in Net Working Capital?
What is the Cash Flow to Creditors?
What is the amount of New Equity?
Explanation / Answer
Calculation of Amount Operating cash flow :
= EBIT + Depreciation - Tax amount
= 27800 + 10500 - 2210
= $36090
Calculation of EBIT & Tax amount :
Calculation of Net Capital Spending :
Net capital spending = Increase in fixed assets + Depreciation for the year
= $34900 + $10500
= $45400
Calculation of Change in Net Working Capital :
= Ending Net working capital - Begining Net working capital
= $35810 - $27420
= $8390
Calculation of cash flow to Creditors :
= - Increase in long term debt + Interest expense
= - $29600 + $21300
= ($8300)
Calculation of amount of New Equity :
Assuming that there were no fixed assets at the begining of the year
= Total assets - Total liabilities
= $34900 + $35810 - $29600
= $41110
Particulars Amount($) Sales 139700 less : Cost of goods sold 101400 EBDIT 38300 less : Depreciation 10500 EBIT 27800 less: Interest 21300 EBT 6500 less : Tax@34% 2210 EAT 429
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