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Industries had operating cash flow of $6,386, interest expense of $2,216 and depreciation of 4,265. At...

Industries had operating cash flow of $6,386, interest expense of $2,216 and depreciation of 4,265. At the beginning of the year, net fixed assets were $16,803, current assets were $5,981, and current liabilities were $3,209. At the end of the year, net fixed assets were $19,187, current assets were $7,967, and current liabilities were $3,771. What is the cash flow to shareholders for 2015? (round to nearest dollar)

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Answer #1

Net capital spending = Net fixed assets at the end - net fixed asset at the beginning + depreciation
= $19,187 - $16,803 + $4,265
= $6,649

Changes in net working capital = Changes in current assets - changes in current liabilities
= ($7,967 - $5,981) - ($3,771 - $3,209)
= $1,986 - $562
= $1,424

Cash flow from assets = Operating cash flow - Net capital spending - Changes in net working capital
= $6,386 - $6,649 - $1,424
= -$1,687

Cash flow from creditors = $2,216

Cash flow to stockholders = Cash flow from assets - Cash flow from creditors
= -$1,687 - $2,216
= -$3,903


Cash flow to stockholders = -$3,903

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