Question

Freeman, Inc., reported the following financial statements for the last two years. FREEMAN, INC. 2017 Income...

Freeman, Inc., reported the following financial statements for the last two years.

FREEMAN, INC.
2017 Income Statement
Sales $ 565,290
Cost of goods sold 273,980
Selling & administrative 124,724
Depreciation 54,567
EBIT $ 112,019
Interest 19,305
EBT $ 92,714
Taxes 48,211
Net income $ 44,503
Dividends $ 10,500
Addition to retained earnings $ 34,003
FREEMAN, INC.
Balance Sheet as of December 31, 2016
Cash $ 13,410 Accounts payable $ 23,994
Accounts receivable 18,985
Inventory 13,803
Current assets $ 46,198 Long-term debt 135,900
Net fixed assets 344,435 Owners' equity 230,739
Total assets $ 390,633 Total liabilities and owners' equity $ 390,633
FREEMAN, INC.
Balance Sheet as of December 31, 2017
Cash $ 14,396 Accounts payable $ 26,996
Accounts receivable 21,090
Inventory 22,763
Current assets $ 58,249 Long-term debt 152,900
Net fixed assets 406,302 Owners' equity 284,655
Total assets $ 464,551 Total liabilities and owners' equity $ 464,551


Calculate the change in net working capital. (Do not round intermediate calculations.)

Calculate the cash flow from assets.

Homework Answers

Answer #1
Current assets in 2016 $ 46,198
Less: Current liabilities in 2016 $ 23,994
Net working capital in 2016 $ 22,204
Current assets in 2016 $ 58,249
Less: Current liabilities in 2016 $ 26,996
Net working capital in 2016 $ 31,253
Change in working capital $    9,049
Cash flow from assets = Cash flow from operations + Change in working capital + Cash flow from fixed assets
Cash flow from assets = ($44,503 + $54,567) - $9,046 + ($344,435-$406,302)
Cash flow from assets = $28,157

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