Question

You are researching Time Manufacturing and have found the following accounting statement of cash flows for the most recent year. You also know that the company paid $99.7 million in current taxes and had an interest expense of $49.7 million.

  

TIME MANUFACTURING Statement of Cash Flows ($ in millions)
Operations
Net income	$	190.0
Depreciation		95.7
Deferred taxes		20.7
Changes in assets and liabilities
Accounts receivable		–19.7
Inventories		23.7
Accounts payable		18.7
Accrued expenses		–10.7
Other		4.7
Total cash flow from operations	$	323.1
Investing activities
Acquisition of fixed assets	–$	198.0
Sale of fixed assets		24.7
Total cash flow from investing activities	–$	173.3
Financing activities
Retirement of long-term debt	–$	179.0
Proceeds from long-term debt sales		133.0
Dividends		–103.0
Repurchase of stock		–30.0
Proceeds from new stock issue		61.0
Total cash flow from financing activities	–$	118.0
Change in cash (on balance sheet)	$	31.8

1. Calculate the operating cash flow. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10.2 million would be entered as 10.2. A negative answer should be indicated by a minus sign. Round your answer to one decimal place, e.g., 32.1.)

Operating cash flow             $

2. Calculate the net capital spending. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10.2 million would be entered as 10.2. A negative answer should be indicated by a minus sign. Round your answer to one decimal place, e.g., 32.1.)

Net capital spending             $

3. Calculate the change in net working capital. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10.2 million would be entered as 10.2. A negative answer should be indicated by a minus sign. Round your answer to one decimal place, e.g., 32.1.)

Change in net working capital             $

4. Calculate the cash flow to creditors. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10.2 million would be entered as 10.2. A negative answer should be indicated by a minus sign. Round your answer to one decimal place, e.g., 32.1.)

Cash flow to creditors             $

5. Calculate the cash flow to stockholders. (Do not round intermediate calculations. Enter your answer in millions, e.g., 10 million would be entered as 10. A negative answer should be indicated by a minus sign. Round your answer to nearest whole dollar amount, e.g., 32.)

Cash flow to stockholders             $

Answer 1

1) Operating cash flow             = Total cash flow from operations (Given) = $ 323.10

2) Net capital spending             = Purchase of Fixed Asset - Sale of Fixed Asset = - 198 + 24.70 = -173.30

3) Change in net working capital = Changes in current assets and liabilities = -19.7 +23.7+18.7-10.7+4.7 = 16.7

4) Cash flow to creditors             = Changes in Accounts payable = $ 18.7

5) Cash flow to stockholders          = Proceeds from new stock Issue - Repurchase of stock - Dividend paid = 61-30-103 = -72