Jetson Spacecraft Corp. shows the following information on its 2009 income state

Question

Jetson Spacecraft Corp. shows the following information on its 2009 income statement: sales = $216,000; costs = $90,000; other expenses = $5,100; depreciation expense = $9,000; interest expense = $12,900; taxes = $29,700; dividends = $10,300. In addition, you're told that the firm issued $7,500 in new equity during 2009 and redeemed $9,100 in outstanding long-term debt. (a) What is the 2009 operating cash flow? (b) What is the 2009 cash flow to creditors? (c) What is the 2009 cash flow to stockholders? (d) If net fixed assets increased by $20,000 during the year, what was the addition to NWC?

Explanation / Answer

sales $216,000 costs $90,000 Gross Profit $126,000 other expenses $5,100 depreciation expense $9,000 EBIT $111,900 interest expense $12,900 EBT $99,000 taxes $29,700 Net Income $69,300 dividends $10,300 (a) What is the 2009 operating cash flow? Net income+interest+depreciation $91,200 (b) What is the 2009 cash flow to creditors? interest+bond redemption $22,000 (c) What is the 2009 cash flow to stockholders? dividend-equity issue $2,800 (d) If net fixed assets increased by $20,000 during the year, what was the addition to NWC? CFA=CFC+CFS = OCF-NET CAPITAL SPENDING-CHANGE IN NWC 22000+2800 = 91200-(20000+9000)-CHANGE IN NWC CHANGE IN NWC = 91200-29000-24800 37400

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