Question

Item	Prior year	Current year
Accounts payable	8,146.00	7,829.00
Accounts receivable	6,087.00	6,734.00
Accruals	992.00	1,458.00
Cash	???	???
Common Stock	10,443.00	12,209.00
COGS	12,753.00	18,177.00
Current portion long-term debt	4,984.00	5,039.00
Depreciation expense	2,500	2,831.00
Interest expense	733	417
Inventories	4,137.00	4,797.00
Long-term debt	14,346.00	14,572.00
Net fixed assets	50,211.00	54,251.00
Notes payable	4,356.00	9,891.00
Operating expenses (excl. depr.)	13,977	18,172
Retained earnings	28,252.00	30,451.00
Sales	35,119	45,384.00
Taxes	2,084	2,775

What is the firm's cash flow from operations?

Submit

Answer format: Number: Round to: 0 decimal places.

Answer 1

Calculate the firm's cash flow from operations as follows:

Sales	45384
Less: COGS	18177
Gross profit	27207
Less: Depreciation expense	2831
Less: Interest expense	417
Less: Operating expenses	18172
Less: Taxes	2775
Net income	3012
Add: Depreciation	2831
Add: Increase in accruals	466
Add: Increase in current portion of long-term debt	55
Total	6364
Less: Decrease in accounts payable	317
Less: Increase in accounts receivable	647
Less: Increase in inventories	660
Net cash flow from operations	4740

Therefore, the firm's cash flow from operations is $4,740.

Note: It is assumed that notes payable are long-term. In case the notes payable are short-term, add the increase in notes payable, $5,535 to the cash flow from operation calculated above and the answer will be $4,740 + $5,535 = $10,275.