Money Badger and Associates, P.C. has sales of $638,298, COGS and SG&A totaling $222,324, depreciation expense...

Money Badger and Associates, P.C. has sales of $638,298, COGS and SG&A totaling $222,324, depreciation expense of $54,535, and taxes paid of $80,400. A partial listing of its balance sheet accounts is as follows:

	Beginning Balance	Ending Balance
Current Assets	$131,700	$119,600
Net Fixed Assets	$712,500	$689,200
Current Liabilities	$108,900	$122,100
Long-Term Debt	$796,000	$830,500

What is the amount of Money Badger's cash flow from assets?

*please show all work to the problem. thank you.*

Expert Solution

EBIT = Sales – COGS and SG&A – Depreciation Expense
EBIT = $638,298 - $222,324 - $54,535
EBIT = 361,439

Operating Cash Flow = EBIT + Depreciation Expense – Tax
Operating Cash Flow = $361,439 + $54,535 - $80,400
Operating Cash Flow = $335,574

Beginning Net Working Capital = Beginning Current Assets – Beginning Current Liabilities
Beginning Net Working Capital = $131,700 - $108,900
Beginning Net Working Capital = $22,800

Ending Net Working Capital = Ending Current Assets – Ending Current Liabilities
Ending Net Working Capital = $119,600 - $122,100
Ending Net Working Capital = -$2,500

Change in Net Working Capital = Ending Net Working Capital – Beginning Net Working Capital
Change in Net Working Capital = -$2,500 - $22,800
Change in Net Working Capital = -$25,300

Net Capital Spending = Ending Net Fixed Assets – Beginning Net Fixed Assets + Depreciation
Net Capital Spending = $689,200 - $712,500 + $54,535
Net Capital Spending = $31,235

Cash Flow from Assets = Operating Cash Flows – Net Capital Spending – Change in Net Working Capital
Cash Flow from Assets = $335,574 - $31,235 – (-$25,300)
Cash Flow from Assets = $335,574 - $31,235 + $25,300
Cash Flow from Assets = $329,639

jeff jeffy answered 1 year ago

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