Question

You are researching Time Manufacturing and have found the following accounting statement of cash flows for the most recent year. You also know that the company paid $98.7 million in current taxes and had an interest expense of $48.7 million.

  

TIME MANUFACTURING Statement of Cash Flows ($ in millions)
Operations
Net income	$	180.0
Depreciation		94.7
Deferred taxes		19.7
Changes in assets and liabilities
Accounts receivable		–18.7
Inventories		22.7
Accounts payable		17.7
Accrued expenses		–9.7
Other		3.7
Total cash flow from operations	$	310.1
Investing activities
Acquisition of fixed assets	–$	208.0
Sale of fixed assets		23.7
Total cash flow from investing activities	–$	184.3
Financing activities
Retirement of long-term debt	–$	169.0
Proceeds from long-term debt sales		123.0
Dividends		–93.0
Repurchase of stock		–20.0
Proceeds from new stock issue		51.0
Total cash flow from financing activities	–$	108.0
Change in cash (on balance sheet)	$	17.8

1. Calculate the operating cash flow. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10.2 million would be entered as 10.2. A negative answer should be indicated by a minus sign. Round your answer to one decimal place, e.g., 32.1.)

Operating cash flow             $    

2. Calculate the net capital spending. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10.2 million would be entered as 10.2. A negative answer should be indicated by a minus sign. Round your answer to one decimal place, e.g., 32.1.)

Net capital spending             $    

3. Calculate the change in net working capital. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10.2 million would be entered as 10.2. A negative answer should be indicated by a minus sign. Round your answer to one decimal place, e.g., 32.1.)

Change in net working capital             $  

4. Calculate the cash flow to creditors. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10.2 million would be entered as 10.2. A negative answer should be indicated by a minus sign. Round your answer to one decimal place, e.g., 32.1.)

Cash flow to creditors             $  

5. Calculate the cash flow to stockholders. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10 million would be entered as 10. A negative answer should be indicated by a minus sign. Round your answer to nearest whole dollar amount, e.g., 32.)

Cash flow to stockholders             $

Answer 1

1)	Operating cash flow = Net income+Depreciation+Interest expense
	From Cash flow from operating activites it is,
	Cash flow from operating activites+Interest expense+Changes in current assets and current liabilities = 310.10 + 48.7 - (-18.7+22.7+17.7-9.7+3.7) =	$        343.10	million
2)	Net capital spending (From cash flow statement--Investing activities section) = 208-23.7 =	$        184.30	million
3)	Change in NWC = -(-18.7+22.7+17.7-9.7+3.7)+17.8(increase in cash) =	$             2.10	million
4)	Cash flow to creditors = Interest expense+Decrease in long term debt = 48.7+(169-123) =	$          94.70	million
5)	Cash flow to stockholders = Dividends paid+Decrease in Common equity = 93-51+20 =	$          62.00	million
	CHECK:
	Operaring cash flow-Net capital spending-Change in NWC = Cash flow to creditors+Cash flow to stockholders
	Operaring cash flow-Net capital spending-Change in NWC = 343.10-184.30-2.10 =	$        156.70	million
	Cash flow to creditors+Cash flow to stockholders = 94.70+62.00 =	$        156.70	million