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In: Finance

3 Category Prior Year Current Year Accounts payable 3,129.00 5,921.00 Accounts receivable 6,895.00 8,907.00 Accruals 5,673.00...

3
Category Prior Year Current Year
Accounts payable 3,129.00 5,921.00
Accounts receivable 6,895.00 8,907.00
Accruals 5,673.00 6,097.00
Additional paid in capital 20,291.00 13,616.00
Cash ??? ???
Common Stock 2,850 2,850
COGS 22,552.00 18,506.00
Current portion long-term debt 500 500
Depreciation expense 990.00 955.00
Interest expense 1,262.00 1,163.00
Inventories 3,079.00 6,682.00
Long-term debt 16,839.00 22,299.00
Net fixed assets 75,662.00 74,289.00
Notes payable 4,026.00 6,578.00
Operating expenses (excl. depr.) 19,950 20,000
Retained earnings 35,521.00 34,545.00
Sales 46,360 45,401.00
Taxes 350 920
What is the firm's cash flow from operations?



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4
Category Prior Year Current Year
Accounts payable 3,129.00 5,921.00
Accounts receivable 6,895.00 8,907.00
Accruals 5,673.00 6,097.00
Additional paid in capital 20,291.00 13,616.00
Cash ??? ???
Common Stock 2,850 2,850
COGS 22,552.00 18,506.00
Current portion long-term debt 500 500
Depreciation expense 990.00 955.00
Interest expense 1,262.00 1,163.00
Inventories 3,079.00 6,682.00
Long-term debt 16,839.00 22,299.00
Net fixed assets 75,662.00 74,289.00
Notes payable 4,026.00 6,578.00
Operating expenses (excl. depr.) 19,950 20,000
Retained earnings 35,521.00 34,545.00
Sales 46,360 45,401.00
Taxes 350 920
What is the firm's cash flow from financing?


Answer format: Number: Round to: 0 decimal places.

Solutions

Expert Solution

Compute the net income, using the equation as shown below:

Net income = Closing retained earnings – Opening retained earnings

                   = $34,545 - $35,521

                  = ($976)

Hence, the net income of the company is ($976).

Compute the change in working capital (WC), using the equation as shown below:

Change in WC = Increase in receivables – Increase in payables – Increase in accruals + Increase in inventory

                       = $2,012 - $2,792 - $424 + $3,603

                       = $2,399

Hence, the increase in WC is $2,399.

Compute the cash from operating activities (CFOA), using the equation as shown below:

CFOA = Net income + Depreciation – Increase in working capital

            = (976) + $955 - $2,399

            = ($2,420)

Hence, the CFOA is $2,420.

Note: Notes payables is considered as a long term liability.

jeff jeffy answered 11 hours ago
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