What is the Cash flow from Assets? What is the OCF? What are the changes in...

What is the Cash flow from Assets?
What is the OCF?
What are the changes in NWC?
What are the Net New Borrowing from Creditors and from Owners?

BALANCE SHEET - 2017 & 2018
ASSETS			LIABILITIES and OWNERS EQUITY
	2017	2018		2017	2018
Current Assets			Current Liabilities
Cash	200	210	Accounts Payable	180	185
A/R	300	290	Notes Payable	230	195
Inventory	250	300	Total Current Liabilities	410	380
Total Current Assets	750	800
			Long-Term Debt	245	255
Fixed Assets
Fixed Assets	500	550	Owner's Equity	595	715
			Common Stock	295	335
			Retained Earnings	300	380

TOTAL ASSETS	1250	1350	TOTAL LIABILITIES and OWNERS EQUITY	1250	1350

INCOME STATEMENT - 2018
Sales		4500
Cost		2950
Depreciation		300
Earnings before Interest and Tax (EBIT)		1250
Interest		350
Earnings before Tax (EBT) - Taxable Income		900
Tax (30%)		270
Net Income		630
Dividend		550
Add. To Retained Earnings		80

Expert Solution

1)	Cash flow from assets = OCF-Net Capital expenditure-Change in NWC
	OCF = EBIT+Depreciation-Taxes = 1250+300-270 =	$ 1,280
	Net capital expenditure = Ending net fixed assets-Beginning net fixed assets+Depreciation = 550-500+300 =	$ 350
	Change in NWC = (800-380)-(750-410) =	$ 80
	CFFA = 1175-350-80 =	$ 850
2)	Cash flow to stockholders = Dividend+Beginning common stock-Ending common stock = 550+295-335 =	$ 510
3)	Cash flow to creditors = Interest expense+Beginning long term loan-Ending long term loan = 350+245-255 =	$ 340
	Cash flow to creditors and stockholders	$ 850
4)	Net new borrowing from creditors = 255-245 =	$ 10.00
	Net new borrowing from stockholders= 335-295 =	$ 40.00
	Net new borrowing from creditors and owners	$ 50.00

jeff jeffy answered 2 years ago

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