Question

In: Finance

Titan Football Manufacturing had the following operating results for 2016: sales = $19,930; cost of goods...

Titan Football Manufacturing had the following operating results for 2016: sales = $19,930; cost of goods sold = $13,830; depreciation expense = $2,220; interest expense = $270; dividends paid = $700. At the beginning of the year, net fixed assets were $21,300, current assets were $3,090, and current liabilities were $1,920. At the end of the year, net fixed assets were $25,340, current assets were $3,580, and current liabilities were $2,010. The tax rate for 2016 was 30 percent.

a. What is net income for 2016? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Net income             $

b. What is the operating cash flow for 2016? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Operating cash flow             $

c. What is the cash flow from assets for 2016? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

   

Cash flow from assets            $

Assume no new debt was issued during the year.

  

d. What is the cash flow to creditors for 2016? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Cash flow to creditors            $

e. What is the cash flow to stockholders for 2016? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Cash flow to stockholders            $

Solutions

Expert Solution

sales

19930

less cost of goods sold

13830

gross profit

6100

less depreciation

2220

operating profit

3880

less interest

270

profit before tax

3610

less tax-30%

1083

net income

2527

Operating cash flow

operating profit

3880

add depreciation

2220

less taxes

-1083

net operating cash flow

5017

cash flow from assets

net capital spending =increase in fixed assets = year end balance-(year beginning balance+depreciation)

1820

1820

change in working capital

400

increase in current assets =3090-3580

-490

increase in current liabilities =2010-1920

90

cash flow from assets = operating cash flow-change in working capital-net capital spending

5017-400-1820

2797

cash flow to creditors

interest-net new debts =270+0

270

cash flow to stockholders

cash flow from assets = cash flow to stockholders+cash flow to creditors

2797 = cash flow to stockholders - 270

cash flow to stockholders

2797+270

3067


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