In 2020 and 2019, your cash was 4,563 and 3,597, your accounts receivables were 7,531 and...

In 2020 and 2019, your cash was 4,563 and 3,597, your accounts receivables were 7,531 and 6,423, and your inventory was 10,235 and 11,563. Similiarly, in 2020 and 2019 your accounts payable was 8,423 and 5,789, and your other current liabilities were 7,413 and 10,356. Lastly from the balance sheet, in 2020 and 2019 your net fixed assets were 74,562 and 71,246. In 2020 your net sales were 111,425, your costs of good sold was 38,999, rent was 48,543, and depreciation was 2,015. You paid interest of 1,728 and your tax rate was 20.36%. What is cash flow from assets (i.e. free cash flow) in 2020?

-4,786
10,452
11,453
13,396
-8,476
5,478

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Expert Solution

Answer:

Operating Cash Flow = EBIT – Taxes + Depreciation
Operating Cash Flow = $21,868 - $4,101 + $2,015
Operating Cash Flow = $19,782

Net Capital Spending = Ending Net FA – Beginning Net FA + Depreciation
Net Capital Spending = $74,562 - $71,246 + $2,015
Net Capital Spending = $5,331

Current Assets = Cash + Accounts Receivable + Inventory

Current Assets, 2020 = $4,563 + $7,531 + $10,235
Current Assets, 2020 = $22,329

Current Assets, 2019 = $3,597 + $6,423 + $11,563
Current Assets, 2019 = $21,583

Current Liabilities = Accounts Payable + Other Current Liabilities

Current Liabilities, 2020 = $8,423 + $7,413
Current Liabilities, 2020 = $15,836

Current Liabilities, 2019 = $5,789 + $10,356
Current Liabilities, 2019 = $16,145

Net Working Capital = Current Assets – Current Liabilities
Net Working Capital, 2020 = $22,329 - $15,836
Net Working Capital, 2020 = $6,493

Net Working Capital, 2019 = $21,583 - $16,145
Net Working Capital, 2019 = $5,438

Change in Net Working Capital = $6,493 - $5,438
Change in Net Working Capital = $1,055

Cash Flow from Assets = Operating Cash Flow - Net Capital Spending - Change in Net Working Capital
Cash Flow from Assets = $19,782 - $5,331 - $1,055
Cash Flow from Assets = $13,396

jeff jeffy answered 1 year ago

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