Calculate the operating cash flow. Calculate the change in net working capital.
ID: 2775835 • 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.)
References
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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 + Depreciation - Taxes = 114908 + 54570 - 38192 = $131286
2) Change in Net Working Capital = Ending Net Working Capital - Beginning Net Working Capital
Ending Net Working Capital = 2014 Current Assets - 2014 Current Liabilities = 58219 - 26990 = $31229
Beginning Net Working Capital = 2013 Current Assets - 2013 Current Liabilities = 46168 - 24000 = $22168
Change in Net Working Capital = 31229 -22168 = $9061
3) Net Capital Spending = Ending Net Fixed Assets - Beginning Net Fixed Assets + Depreciation
= 406305 - 344606 + 54570 = $116269
4) Cash Flow from Assets = Operating Cash Flow - Changes in Net Working Capital - Net Capital Spending
= 131286 - 9061 - 116269 = $5956
5) Cash Flow to Creditors = Interest Paid - (Ending Long Term Debt - Beginning Long Term Debt)
= 19428 - (152600 - 136320) = 19428 - 16280 = $3148
6) Cash Flow to Stockholders = Dividends Paid - Net New Equity Raised
Net New Equity Raised = 2014 Owner's Equity - Retained Earnings - 2013 Owner's Equity
= 284934 - 47088 - 230454 = $7392
Cash Flow to Stockholders = 10200 + 7392 = $17592
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