Use the following information for Ingersoll, Inc., (assume the tax rate is 40 percent): 2014...

Use the following information for Ingersoll, Inc., (assume the tax rate is 40 percent):

	2014		2015
Sales	$	8,035	$	8,609
Depreciation		1,145		1,146
Cost of goods sold		2,716		3,080
Other expenses		659		554
Interest		545		623
Cash		4,129		5,223
Accounts receivable		5,459		6,147
Short-term notes payable		814		766
Long-term debt		13,680		16,250
Net fixed assets		34,655		35,517
Accounts payable		4,356		4,205
Inventory		9,690		9,958
Dividends		976		1,071

For 2015, calculate the cash flow from assets, cash flow to creditors, and cash flow to stockholders. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign. Round your answers to 2 decimal places, e.g., 32.16.)


Cash flow from assets	$
Cash flow to creditors	$
Cash flow to stockholders	$

Solutions

Expert Solution

Answer of Part a:

EBIT = Sales – Cost of Goods Sold – Depreciation – other expenses
EBIT = $8,609 - $3,080 - $1,146 - $554
EBIT = $3,829

EBT = EBIT – Interest
EBT = $3,829 - $623
EBT = $3,206

Tax= EBT * 40%
Tax = $3,206 *40%
Tax = $1,282.40

Operating Cash flow = EBIT + Depreciation – Taxes
Operating Cash Flow = $3,829 + $1,146 - $1,282.4
Operating Cash Flow = $3,692.6

Beginning working capital = Current Assets – Current Liabilities
Beginning Working Capital = ($4,129 + $5,459 + $9,690) – ($814 + $4,356)
Beginning Working Capital = $19,278 - $5,170
Beginning Working Capital = $14,108

Ending Working Capital = Current Assets – Current Liabilities
Ending Working Capital = ($5,223 + $6,147 + $9,958) – ($766 + $4,205)
Ending Working Capital = $21,328 -$4,971
Ending Working Capital = $16,357

Change in Net working capital = Ending Working Capital - Beginning Working Capital
Change in Net working capital = $16,357 - $14,108
Change in Net working capital = $2,249

Net Capital Spending = Ending Fixed Assets – Beginning Fixed Assets + Depreciation
Net Capital Spending = $35,517 - $34,655 + $1,146
Net Capital Spending = $2,008

Cash flow from Assets = Operating Cash flow – change in net working capital – Net capital spending
Cash flow from Assets =$3,692.6 - $2,249 - $2,008
Cash flow from Assets = -$564.4

Answer of Part b:

Cash flow to Creditors = Interest – Ending Long term debt + Beginning long term debt
Cash flow to Creditors = $623 - $16,250 + $13,680
Cash flow to Creditors = -$1,947

Answer of Part c:

Cash flow to stockholders = Cash flow from assets – Cash flow to creditors
Cash flow to stockholders = -$564.4 + $1,947
Cash flow to stockholders = $1,382.6

jeff jeffy answered 7 months ago

Next > < Previous

Related Solutions

Use the following information for Ingersoll, Inc., (assume the tax rate is 40 percent): 2014...

Use the following information for Ingersoll, Inc., (assume the tax rate is 40 percent): 2014 2015 Sales $ 9,535 $ 10,109 Depreciation 1,295 1,296 Cost of goods sold 2,866 3,230 Other expenses 809 704 Interest 695 773 Cash 4,279 5,373 Accounts receivable 5,609 6,297 Short-term notes payable 964 916 Long-term debt 15,330 17,750 Net fixed assets 36,155 37,317 Accounts payable 4,656 4,355 Inventory 9,840 10,108 Dividends 1,126 1,221 For 2015, calculate the cash flow from assets, cash flow...

Use the following information for Ingersoll, Inc., (assume the tax rate is 35 percent): 2014...

Use the following information for Ingersoll, Inc., (assume the tax rate is 35 percent): 2014 2015 Sales $ 8,535 $ 9,109 Depreciation 1,195 1,196 Cost of goods sold 2,766 3,130 Other expenses 709 604 Interest 595 673 Cash 4,179 5,273 Accounts receivable 5,509 6,197 Short-term notes payable 864 816 Long-term debt 14,230 16,750 Net fixed assets 35,155 36,117 Accounts payable 4,456 4,255 Inventory 9,740 10,008 Dividends 1,026 1,121 For 2015, calculate the cash flow from assets, cash flow...

Use the following information for Ingersoll, Inc., (assume the tax rate is 30 percent): 2013...

Use the following information for Ingersoll, Inc., (assume the tax rate is 30 percent): 2013 2014 Sales $ 12,073 $ 13,236 Depreciation 1,671 1,746 Cost of goods sold 4,029 4,717 Other expenses 951 829 Interest 800 931 Cash 6,082 6,496 Accounts receivable 8,050 9,457 Long-term debt 20,350 24,661 Net fixed assets 50,910 54,303 Accounts payable 5,580 5,831 Inventory 14,300 15,298 Dividends 1,000 1,628 Prepare a balance sheet for this company for 2013 and 2014. (Do not round intermediate...

Use the following information for Ingersoll, Inc. Assume the tax rate is 24 percent. 2018...

Use the following information for Ingersoll, Inc. Assume the tax rate is 24 percent. 2018 2019 Sales $ 21,573 $ 18,936 Depreciation 1,861 1,936 Cost of goods sold 4,979 4,907 Other expenses 1,046 924 Interest 895 1,026 Cash 6,367 7,066 Accounts receivable 8,240 10,027 Short-term notes payable 1,370 1,347 Long-term debt 20,920 25,136 Net fixed assets 51,328 54,873 Accounts payable 4,704 5,244 Inventory 14,623 15,488 Dividends 1,950 1,818 Prepare a balance sheet for this company for 2018 and...

Use the following information for Ingersoll, Inc. Assume the tax rate is 24 percent. 2018 2019...

Use the following information for Ingersoll, Inc. Assume the tax rate is 24 percent. 2018 2019 Sales $17,573 $16,536 Depreciation 1,781 1,856 Cost of Good Sold 4,579 4,827 Other Expenses 1,006 884 Interest 855 986 Cash 6,247 6,826 Account Receivable 8,160 9,787 Short-term notes payable 1,290 1,267 Long-term debt 20,680 24,936 Net Fixed assets 51,152 54,633 Accounts payable 4,576 5,004 Inventory 14,487 15,408 Dividends 1,550 1,738 Prepare a balance sheet for this company for 2018 and 2019. (Do not round...

Use the following information for Ingersoll, Inc. Assume the tax rate is 24 percent. 2018 2019...

Use the following information for Ingersoll, Inc. Assume the tax rate is 24 percent. 2018 2019 Sales $ 26,549 $ 19,368 Depreciation 2,576 2,684 Cost of goods sold 6,690 6,931 Other expenses 1,483 1,278 Interest 1,210 1,425 Cash 8,776 9,847 Accounts receivable 11,688 14,082 Short-term notes payable 1,874 1,841 Long-term debt 29,660 35,729 Net fixed assets 73,229 78,050 Accounts payable 6,389 7,240 Inventory 20,764 22,062 Dividends 2,979 2,514 For 2019, calculate the cash flow from assets, cash flow to creditors,...

Use the following information for Taco Swell, Inc., (assume the tax rate is 30 percent): 2014...

Use the following information for Taco Swell, Inc., (assume the tax rate is 30 percent): 2014 2015 Sales $ 17,073 $ 16,236 Depreciation 1,771 1,846 Cost of goods sold 4,529 4,817 Other expenses 1,001 879 Interest 850 981 Cash 6,232 6,796 Accounts receivable 8,150 9,757 Short-term notes payable 1,280 1,257 Long-term debt 20,650 24,911 Net fixed assets 51,130 57,120 Accounts payable 4,560 4,974 Inventory 14,470 15,398 Dividends 1,500 1,728 For 2015, calculate the cash flow from assets, cash flow to...

Use the following information for Taco Swell, Inc., (assume the tax rate is 23 percent): ...

Use the following information for Taco Swell, Inc., (assume the tax rate is 23 percent): 2017 2018 Sales $ 17,073 $ 16,236 Depreciation 1,771 1,846 Cost of goods sold 4,529 4,817 Other expenses 1,001 879 Interest 850 981 Cash 6,232 6,796 Accounts receivable 8,150 9,757 Short-term notes payable 1,280 1,257 Long-term debt 20,650 24,911 Net fixed assets 51,130 54,603 Accounts payable 4,560 4,974 Inventory 14,470 15,398 Dividends 1,500 1,728 Prepare a balance sheet for this company for 2017...

Use the following information for Taco Swell, Inc., (assume the tax rate is 24 percent): ...

Use the following information for Taco Swell, Inc., (assume the tax rate is 24 percent): 2017 2018 Sales $ 24,549 $ 19,248 Depreciation 2,536 2,644 Cost of goods sold 6,490 6,891 Other expenses 1,455 1,258 Interest 1,190 1,405 Cash 8,756 9,727 Accounts receivable 11,648 13,962 Short-term notes payable 1,834 1,801 Long-term debt 29,540 35,629 Net fixed assets 73,137 78,090 Accounts payable 6,365 7,120 Inventory 20,696 22,022 Dividends 2,779 2,474 For 2018, calculate the cash flow from assets, cash flow...

Use the following information for Taco Swell, Inc., (assume the tax rate is 22 percent): ...

Use the following information for Taco Swell, Inc., (assume the tax rate is 22 percent): 2017 2018 Sales $ 18,573 $ 17,136 Depreciation 1,801 1,876 Cost of goods sold 4,679 4,847 Other expenses 1,016 894 Interest 865 996 Cash 6,277 6,886 Accounts receivable 8,180 9,847 Short-term notes payable 1,310 1,287 Long-term debt 20,740 24,986 Net fixed assets 51,196 54,693 Accounts payable 4,608 5,064 Inventory 14,521 15,428 Dividends 1,650 1,758 Prepare a balance sheet for this company for 2017...

Subjects