The 2014 balance sheet of Sugarpova\'s Tennis Shop, Inc., showed long-term debt

Question

The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term debt of $6.4 million, and the 2015 balance sheet showed long-term debt of $6.6 million. The 2015 income statement showed an interest expense of $225,000. During 2015, the company had a cash flow to creditors of $25,000 and the cash flow to stockholders for the year was $80,000. Suppose you also know that the firm’s net capital spending for 2015 was $1,490,000, and that the firm reduced its net working capital investment by $93,000. What was the firm’s 2015 operating cash flow, or OCF? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Operating cash flow $

The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term debt of $6.4 million, and the 2015 balance sheet showed long-term debt of $6.6 million. The 2015 income statement showed an interest expense of $225,000. During 2015, the company had a cash flow to creditors of $25,000 and the cash flow to stockholders for the year was $80,000. Suppose you also know that the firm's net capital spending for 2015 was $1,490,000, and that the firm reduced its net working capital investment by $93,000. What was the firm's 2015 operating cash flow, or OCF? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Operating cash flow

Explanation / Answer

In Given Example, only Two items are of Operating Cash Flow i.e. Interest Expense and Redueced Net Working Capital. So

Interest expense = $225,000 and Increase in working capital = $93000

So Operating Cash flow would be = -225,000 + 93000

= -132,000

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