Flamingo, Inc. 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less: Cost of...

Flamingo, Inc. 2019 statement of comprehensive income ($ in millions)
Net sales	$1,384
Less: Cost of goods sold	605
Less: Depreciation	180
Earnings before interest and taxes	599
Less: Interest paid	80
Taxable income	519
Less: Taxes	156
Net income	$363
Addition to retained earnings	$254
Dividends paid	109

Flamingo, Inc. 2018 and 2019 Statement of financial positions ($ in millions)
	2018	2019		2018	2019
Cash	$100	$121	Accounts payable	$400	$350
Accounts rec.	350	425	Notes payable	390	370
Inventory	440	410	Total	$790	$720
Total	$890	$956	Long-term debt	500	550
Net fixed assets	1,556	1,704	Owner’s equity
			Common stock	600	580
			Retained earnings	556	810
			Total	1,156	1,390
Total assets	$2,446	$2,660	Total liabilities	$2,446	$2,660

Q1. Show detailed calculations of CFFA under two approaches (1)Cash Flow From Assets (CFFA) = Cash Flow to Bondholders + Cash Flow to Shareholders AND (2)Cash Flow From Assets = Operating Cash Flow – Net Capital Spending – Changes in NWC we have discussed in our class.

Q2. Comment on the cash flow performance of the company in the years of 2018 and 2019.(20 marks)

Q3. If you were to advise Flamingo Inc. for the year 2020, what recommendations would you propose regarding the capital structure of the company? Why?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Flamingo, Inc. 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less: Cost of...

Flamingo, Inc. 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less: Cost of goods sold 605 Less: Depreciation 180 Earnings before interest and taxes 599 Less: Interest paid 80 Taxable income 519 Less: Taxes 156 Net income $363 Addition to retained earnings $254 Dividends paid 109 Unit 2 Exercise Questions Flamingo, Inc. 2018 and 2019 Statement of financial positions ($ in millions) 2018 2019 2018 2019 Cash $100 $121 Accounts payable $400 $350 Accounts rec. 350 425...

Windswept, Inc. 2017 Income Statement ($ in millions) Net sales $ 8,700 Cost of goods sold...

Windswept, Inc. 2017 Income Statement ($ in millions) Net sales $ 8,700 Cost of goods sold 7,340 Depreciation 405 Earnings before interest and taxes $ 955 Interest paid 82 Taxable income $ 873 Taxes 306 Net income $ 567 Windswept, Inc. 2016 and 2017 Balance Sheets ($ in millions) 2016 2017 2016 2017 Cash $ 150 $ 185 Accounts payable $ 1,180 $ 1,260 Accounts rec. 920 730 Long-term debt 1,000 1,265 Inventory 1,520 1,550 Common stock 3,210 2,900...

Nabors Inc. 2009 Income Statement ($ in millions) Bet Sales $9,610 Less: Cost of Goods Sold...

Nabors Inc. 2009 Income Statement ($ in millions) Bet Sales $9,610 Less: Cost of Goods Sold 6,310 Less Depreciation 1,370 Earnings before interest and taxes 1,930 Less: Interest paid 630 Taxable income $1,300 Less taxes 455 Net Income $ 845 Nabors Inc. 2008 and 2009 Balance sheets ($ in millions) 2008 2009 2008 2009 Cash $310 $405 Accounts Pay $2720 $2570 Accounts Rec. 2640 3055 Notes Pay 100 0 Inventory 3275 3850 Total $2820 $2570 Total $6225 $7310 Long Term...

Bayside Inc. 2005 Income Statement ($ in thousands) Net sales $5,680 Less: Cost of goods sold...

Bayside Inc. 2005 Income Statement ($ in thousands) Net sales $5,680 Less: Cost of goods sold 4,060 Less: Depreciation 420 Earnings before interest and taxes 1,200 Less: Interest paid 30 Taxable Income $1,170 Less: Taxes 410 Net income $ 760 Bayside, Inc. 2004 and 2005 Balance Sheets ($ in thousands) 2004 2005 2004 2005 Cash $ 70 $ 180 Accounts payable $1,350 $1,170 Accounts rec. 980 840 Long-term debt 720 500 Inventory 1,560 1,990 Common stock 3,200 3,500 Total $2,610...

OPQ, Inc. 2018 statement of comprehensive income Net sales $8,953 Cost of goods sold $5,865 Depreciation...

OPQ, Inc. 2018 statement of comprehensive income Net sales $8,953 Cost of goods sold $5,865 Depreciation $? EBIT $? Interest paid $675 Earnings before taxes $675 Taxes $400 Net income $705 Dividends paid $? Addition to retained earnings $450 OPQ, Inc. Statement of financial positions as of December 31, 2017 and 2018 2017 2018 2017 2018 Cash $725 $1,135 Accounts payable $859 $1,031 Accounts rec. $2,330 $? Notes payable $? $4,020 Inventory $3,240 $5, 202 Current liabilities $? $? Current...

Times-Interest-Earned Ratio EVANS and Sons, Inc. Income Statement (in millions) 2019 2018 Net sales $9,800 $9,300...

Times-Interest-Earned Ratio EVANS and Sons, Inc. Income Statement (in millions) 2019 2018 Net sales $9,800 $9,300 Cost of goods sold (5,500) (5,200) Gross profit 4,300 4,100 Selling and administrative expenses (2,800) (2,700) Income from operations 1,500 1,400 Interest expense (300) (250) Income before income taxes 1,200 1,150 Income tax expense (220) (200) Net income $980 $950 EVANS and Sons, Inc. Balance Sheet (in millions) 2019 2018 Assets Current assets Cash and cash equivalents $100 $300 Accounts receivable 900 800 Inventory...

Income Statement 2019 Common Size Income Statement Details 2019 2018 Sales 30,000,000 Sales/Sales 100.00% 100.00% Less:...

Income Statement 2019 Common Size Income Statement Details 2019 2018 Sales 30,000,000 Sales/Sales 100.00% 100.00% Less: Cost of Goods Sold 21,000,000 Cost of Goods Sold/Sales 70.00% 65.90% Gross Profits 9,000,000 Gross Profits/Sales 30.00% 34.10% Less: Operating Expenses Less: Operating Expenses Selling Expense 3,000,000 Selling Expense/Sales 10.00% 12.70% General and Administrative Expenses 1,800,000 General and Administrative Expenses/Sales 6.00% 6.30% Lease Expense 200,000 Lease Expenses/Sales 0.67% 0.60% Depreciation Expense 1,000,000 Depreciation Expense/Sales 3.33% 3.60% Total Operating Expense 6,000,000 Total Operating Expense/Sales 20.00%...

Bayside, Inc. 2017 Income Statement ($ in thousands) Net sales $ 6,170 Cost of goods sold...

Bayside, Inc. 2017 Income Statement ($ in thousands) Net sales $ 6,170 Cost of goods sold 4,590 Depreciation 395 Earnings before interest and taxes $ 1,185 Interest paid 44 Taxable income $ 1,141 Taxes 399 Net income $ 742 Bayside, Inc. 2016 and 2017 Balance Sheets ($ in thousands) 2016 2017 2016 2017 Cash $ 145 $ 250 Accounts payable $ 1,710 $ 1,770 Accounts rec. 1,130 970 Long-term debt 880 680 Inventory 1,805 2,130 Common stock 3,380 3,350...

Freeport Company's income statement for last year is as follows: Income Statement Sales $300,000 Less: Cost...

Freeport Company's income statement for last year is as follows: Income Statement Sales $300,000 Less: Cost of goods sold 200,000 Gross margin 100,000 Less: Operating expenses 60,000 Income before taxes 40,000 Less: Income taxes 16,000 Net income $24,000 The beginning and ending balances for last year are available for the following accounts: Ending balance Beginning balance Accounts receivable $32,000 $40,000 Inventory 60,000 50,000 Prepaid expenses 12,000 8,000 Accumulated depreciation (40,000) (30,000) Accounts payable 30,000 45,000 Accrued liabilities 16,000 10,000 Income...

Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in $ millions) Net sales...

Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in $ millions) Net sales $ 895.00 Cost of goods sold 755.00 Depreciation 45.00 Earnings before interest and taxes (EBIT) $ 95.00 Interest expense 26.00 Income before tax $ 69.00 Taxes 14.49 Net income $ 54.51 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Current assets $ 383 $ 340 Long-term assets 286 236 Total assets $ 669 $ 576 Liabilities and shareholders’ equity...

Subjects