In: Finance
2017 |
2018 |
|
Sales |
$2,900 |
$3,300 |
COGS |
2,030 |
2,310 |
Interest |
410 |
420 |
Dividends |
56 |
79 |
Depreciation |
290 |
330 |
Cash |
250 |
150 |
Receivables |
242 |
412 |
Current |
900 |
1,100 |
Inventory |
1,015 |
900 |
Long-term debt |
3,200 |
3,100 |
Net fixed assets |
6,000 |
5,700 |
Tax rate |
34% |
34% |
What is cash flow to stockholders for 2018?
A. $79
B. $189
C. $445
D. $524
E. $603
Why is the answer E? please explain.
Answer;
Option E $603
2018(Amount$) | |
Sales | 3300 |
Cost of good sold | 2310 |
EBIT & Depriciation |
990 |
Depriciation | 330 |
EBIT | 660 |
Interest | 420 |
EBT | 240 |
TAX@34% | 81.6 |
EAT | 158.4 |
Cash Flow from working capital change
Cash increases | Cash Decreases | |
Receivable | 170 | |
inventory | 115 | |
Current Libilities | 200 | |
Total | 315 | 170 |
Net Cash inflow from working capital change = $315-$170 = $145
Cash Flow from Financial activity
(long term debt) = $3200 (2017) - $3100 (2018) = $100 cash outflow
Dividend paid = $79 cash outflow
Cash Flow from investing Activity(Net Fixed Assets) = $6000(2017) - ($5700+330)(2018) = $30 cash Outflow
Non Cash Item = $330 (Depriciation)
Total Cash flow for company = Net profit + non cash Item + Cash from working capital change + cash from investing + cash From financial + opening cash - closing cash
= $158.4 + $330 + $145 -$100- $79 -$30 +$250 - $150
=$524. 4 or $524
Total cash flow for stakeholders = company's cash flow + dividend
= $524 + $79
= $603
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