Part 2: Problems 2008 2009 sales $7,487 $9,618 Interest paid 735 785 Cost of goods sold...

Part 2: Problems

	2008	2009
sales	$7,487	$9,618
Interest paid	735	785
Cost of goods sold	2,713	3,284
Other costs	592	728
Current assets	3,131	3,383
Current liabilities	564	643
Net fixed assets	8,592	7,517
Long-term debt	1,455	1,698
Dividends paid	120	100
Depreciation	202	263

Answer all the following questions for the year 2009. The tax rate is 35%.

What was net income (NI)?
What was operating cash flow (OCF)?
What was net capital spending (NCS)?
What was the change in net working capital (ΔNWC)?
What was the cash flow from assets (CFA)?

Expert Solution


Answer a
Calculation of net Income for 2009
Sales	$9,618.00
Less : Cost of goods sold	$3,284.00
Gross Margin	$6,334.00
Less : Other Cost	$728.00
Less : Depreciation	$263.00
Operating Income	$5,343.00
Less : Interest Expense	$785.00
Profit before Tax	$4,558.00
Less : Tax @ 35%	$1,595.30
Net Income	$2,962.70

Answer b
Calculation of operating cashflow for 2009
Net Income	$2,962.70
Depreciation	$263.00
Operating Cash flow	$3,225.70

Answer c
Net capital spending
Net Fixed assets for 2008	$8,592.00
Less : Depreciation for 2009	$263.00
Less : Net Fixed Assets for 2009	$7,517.00
Net capital spending	$812.00

Answer d
Change in net working capital
Increase in current assets	-$252.00
Increase in Current Liabilities	$79.00
Change in net working capital	-$173.00

Answer e
Cash flow from assets = Operating Cash flow + Net Capital spending + Change in net working capital
Cash flow from assets = $3,225.70 + $812 - $173 = $3,864.70

jeff jeffy answered 6 months ago

Sales = $630,000, cost of goods sold = $480,000, depreciation = $43,000, interest paid = $62,000,...

Sales = $630,000, cost of goods sold = $480,000, depreciation = $43,000, interest paid = $62,000, tax rate = 35%. 1) What is net income? 2) If the company paid out $15,000 in dividends, what is the addition to retained earnings? 3) If the company has 25,000 shares of common stock outstanding, what are the earnings per share? 4) What is the dividend per share?

Assume sales are $7,990, cost of goods sold is $2,120, depreciation expense is $140, interest paid...

Assume sales are $7,990, cost of goods sold is $2,120, depreciation expense is $140, interest paid is $180, selling and general expenses are $360, dividends paid are $1,170, and the tax rate is 21 percent. What is the addition to retained earnings? Group of answer choices $2,005.80 $4,100.10 $2,930.10 $3,175.80

2010 2009 Sales $ 4,400 $ 3,760 Cost of goods sold 2,500 2,750

2010 2009 Sales $ 4,400 $ 3,760 Cost of goods sold 2,500 2,750 Gross margin 1,900 1,010 Operating expenses 750 380 Operating income 1,150 630 Interest expense 250 130 Income before taxes 900 500 Income taxes (25%) 225 125 Net income $ 675 $ 375 a. In a common-size analysis, what percentage would you show for Income taxes for 2010? 5.50% -5.60% 18.50% 5.11% b. In...

During 2009, Raines Umbrella Corp. had sales of $740,000. Cost of goods sold, administrative and selling...

During 2009, Raines Umbrella Corp. had sales of $740,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $574,000, $89,000, and $128,000, respectively. In addition, the company had an interest expense of $100,000 and a tax rate of 30 percent. (Ignore any tax loss carryback or carryforward provisions.) Assume Raines Umbrella Corp. paid out $19,000 in cash dividends. If spending on net fixed assets and net working capital was zero, and if no new stock was issued...

Nabors Inc. 2009 Income Statement ($ in millions) Bet Sales $9,610 Less: Cost of Goods Sold...

Nabors Inc. 2009 Income Statement ($ in millions) Bet Sales $9,610 Less: Cost of Goods Sold 6,310 Less Depreciation 1,370 Earnings before interest and taxes 1,930 Less: Interest paid 630 Taxable income $1,300 Less taxes 455 Net Income $ 845 Nabors Inc. 2008 and 2009 Balance sheets ($ in millions) 2008 2009 2008 2009 Cash $310 $405 Accounts Pay $2720 $2570 Accounts Rec. 2640 3055 Notes Pay 100 0 Inventory 3275 3850 Total $2820 $2570 Total $6225 $7310 Long Term...

2009 2010 Sales ($ millions) 1000 1112 Cost of Goods Sold ($ millions) 500 556 Other...

2009 2010 Sales ($ millions) 1000 1112 Cost of Goods Sold ($ millions) 500 556 Other Expenses ($ millions) 100 111 Depreciation ($ millions) 100 100 Interest Expense ($ millions) 50 55 Total Current Assets ($ millions) 600 700 Total Fixed Assets ($ millions) 2200 2500 Accumulated Depreciation ($ millions) 400 This can be determined from the information given Net Fixed Assets ($ millions) 1800 2000 Total Current Liabilities ($ millions) 450 550 Long-term Liabilities ($ millions) 900 975 Common...

sales=$10,980 cost of goods sold=$8,100 depreciation expense=$1,440 interest expense=$180 dividends paid=$270 Tax rate for the year...

sales=$10,980 cost of goods sold=$8,100 depreciation expense=$1,440 interest expense=$180 dividends paid=$270 Tax rate for the year was 35% what is the operating cash flow for the year

As part of the calculation for cost of goods sold it is necessary to determine the...

As part of the calculation for cost of goods sold it is necessary to determine the value of goods on hand, termed merchandise inventory. Accountants use two basic methods for determining the amount of merchandise inventory. Identify the two methods and describe the circumstances (including examples of users of each method) under which each method would be used. Describe the computation necessary to arrive at the cost of goods sold figure on a merchandising company's income statement.

The Cost of Sales (or Cost of Goods Sold) is usually considered the most important cost...

The Cost of Sales (or Cost of Goods Sold) is usually considered the most important cost in hospitality businesses. How is it determined? Please select the most appropriate answer. 1. It is calculated by adding up all purchases of inventory during one accounting period. 2. It is the amount of inventory on hand. It is calculated by adding the value of every item of inventory available on hand. 3. It is calculated by adding all purchase amounts to the beginning...

as follows: Sales (160,000 units) $960,000 Cost of goods sold

as follows: Sales (160,000 units) $960,000 Cost of goods sold 640,000 Gross margin 320,000 Operating expenses 260,000 Operating income $60,000 Kramer is developing the 2016 budget. In 2016 the company would like to increase selling prices by 12.5%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. a)...

Question