In: Finance
Homework 2 Statement of Cash flows
Construct a cash flow statement for XYZ Company using the following information
XYZ COMPANY
BALANCE SHEET
DECEMBER 31, 2006, 2007
Assets Liab + equity
2006 2007 2006 2007
Cash 120 150 Acc. payable 200 150
Mkt. Sec 80 100 Notes payable 300 250
Acc. Rec 360 200 other liab. 100 150
Inventory 340 600
current assets 900 1050 Current liab. 600 550
Gross FA 2200 2400 Long term debt 1000 1200
Acc. Dep 500 600 Common stock 400 250
Net fixed asset 1700 1800 Retained earnings 600 850
Total assets 2600 2850 Total liab.+equity 2600 2850
The firm’s EAT for 2007 was 400
Dividend = Beginning retained earnings + Net income - Ending
retained earnings
Dividend = $600 + $400 - $850
Dividend = $150