In: Finance
2. Could a company’s cash flow to stockholders be negative in a given year? Explain how this might come about.
a. What is the value of total assets account in the balance sheet?
b. What is the value of total liabilities account in the balance sheet?
c. What is the value shareholder’ equity account in the balance sheet?
=> True/False
=> True/False
PLEASE SHOW HOW YOU GOT ANSWERS!!
2. Cash flow to stockholders can be negative in any given year :
The formula for the cash flow to stock holders is :
Dividend paid - new equity raised.
When the amount paid to the stockholders as dividend as less than the amount raised as new equity, then the cash flow to stockholders is negative.
3. Cash flow to creditors = Interest paid – Net new borrowing
If a company borrows more than it pays in interest and principal, its cash flow to creditors will be negative.
4. the value for total assets = current assets + fixed assets
= $15,000 + $13,500
= $28,500
b total liabilities = current liabilities + long term debt
= $5000 + $20,300
=$25,300
c. Equity = Total assets - total liabilities
= $28,500 - $25,300
= $3,200
d. net working capital:
current assets - current liabilities
=$15,000 - $5000
= $10,000
5. a . TRUE STATEMENT . liquid assets earn a high rate of return. Any asset that can be sold within the next year is considered liquid.
b. Liquid assets can be converted into cash regardless of the price obtained. Any asset that can be sold within the next year is considered liquid.
TRUE STATEMNENT.