Question

Using the incomplete balance sheet and income statement, What is cash provided by operations during 2016?(do...

Using the incomplete balance sheet and income statement, What is cash provided by operations during 2016?(do not round intermediate calculations. Enter answer in millions rounded 2 decimal places)

BALANCE SHEET AT END OF YEAR

(Figures in $ millions)

Assets

2015

2016

Liabilities and Shareholders' Equity

2015

2016

Current assets

$97

175

Current liabilities

$64

81

Net fixed assets

870

970

Long-term debt

635

820

INCOME STATEMENT, 2016

(Figures in $ millions)

Revenue

1,985

Cost of goods sold

1,065

Depreciation

385

Interest expense

247

Homework Answers

Answer #1

First we will calculate the net income as per below:

Net income = Revenue - Cost of goods sold - Depreciation - Interest expense

Putting the values in the above equation, we get,

Net income = $1985 - $1065 - $385 - $247

Net income = $288

Now, Cash from operations can be found out by the following statement of cash flows:

Statement of cash flows (partial) for 2016:

Description Amount
Cash from operations:
Net income $288
Adjustments to reconcile net income to net cash from operating activities
Add: Depreciation $385
Less: Increase in current assets ($78)
Add: Increase in current liabilities $17
Net cash provided by operating activities $612
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