Question

Levin Enterprises, which operates from somewhere under the brick and steel of a non-descript building, has an operating profit of $75,337, depreciation expense of $5,450, and taxes paid of $18,955. A partial listing of its balance sheet accounts is as follows:

	Beginning Balance	Ending Balance
Current Assets	$185,200	$136,672
Net Fixed Assets	$800,533	$708,540
Current Liabilities	$76,308	$96,657
Long-Term Debt	$267,000	$248,000

What is their level of cash flow from assets?

Answer 1

Cash flow from assets is the total of all cash flows related to the assets. The concept consists of the following three types of cash flows:

• Cash flow generated by operations. This is net income plus all non-cash expenses (includes depreciation and amortization)

• Changes in working capital. This is the net change in current assets and current liabilities during the given period. An increase in working capital uses cash, while a decrease produces cash.

• Changes in fixed assets. This is the net change in fixed assets before the effects of depreciation

Cash Flow from Asset in the given question comes to be $179,237. Details of the calculation are attached below: