Question

Use the income statement and the list of changes to answer the question.

Torche Corporation Income Statement January 1 to December 31, 2019 (amounts in thousands)
Revenue	9,100
Cost of Goods Sold (COGS)	2,730
Gross Income	6,370
Sales, General, & Administrative Expenses (SG&A)	910
Depreciation Expense	500
Other Expenses	600
Earnings Before Interest & Taxes (EBIT)	4,360
Interest	180
Pre-Tax Income	4,180
Income Taxes	1,672
Net Income	2,508

Between January 1 and December 31, 2019:

1. Accounts Receivable increase by $800,000
2. Accounts Payable decrease by $400,000
3. Gross Property, Plant, & Equipment increase by $5,400,000
4. Long Term Debt increases by $100,000

Assume no other changes

What is the Net Cash Flow?

Note: Account change amounts are provided in dollars but the financial statement units are thousands of dollars.

Please specify your answer in the same units as the financial statements (i.e., enter the number from your completed statement of cash flows).

Answer 1

Cash Flow Statement
Particulars	$ (000s)	$ (000s)
Cash flow from operating activities
Pre-tax income	4,180.00
Add: Non Cash Non Operating expenses
Depreciation	500.00
Operating profit before Working capital changes	4,680.00
Less: Decrease in Creditors	(400.00)
Less: Increase in Debtors	(800.00)
Cash generated from Operating activities	3,480.00
Less: Income tax paid	(1,672.00)
Net Cash from Operating activities - (A)		1,808.00
Cash flow from Investing activities
Purchase of Fixed Assets	(5,400.00)
Increase in Long term Debt	100.00
Net Cash used in Investing Activities - (B)		(5,300.00)
Cash flow from Financing activities
Interest Paid	(180.00)
Net Cash used in Financing Activities - (C)		(180.00)
Net Cash Flow (A+B+C)		(3,672.00)