Question

Weiland Co. shows the following information on its 2016 income statement: sales = $153,000; costs = $81,900; other expenses = $5,200; depreciation expense = $10,900; interest expense = $8,400; taxes = $16,330; dividends = $7,200. In addition, you're told that the firm issued $2,600 in new equity during 2016 and redeemed $3,900 in outstanding long-term debt.
  
a. What is the 2016 operating cash flow? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  
Operating cash flow            $
  
b. What is the 2016 cash flow to creditors? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  
Cash flow to creditors            $
  
c. What is the 2016 cash flow to stockholders? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  
Cash flow to stockholders            $
  
d. If net fixed assets increased by $20,250 during the year, what was the addition to NWC? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  
Addition to net working capital            $

Answer 1

a. Operating Cash Flow =Sales-Costs-Other expenses-Taxes =153000-81900-5200-16330 =49570

b. Cash Flow to creditors = Interest - New Debt =8400-(-3900) =12300

c. Cash Flow to Equity Holders =Dividends-New Equity =7200-2600 =4600

d. Cash Flow from Assets = Cash Flow from Creditors + Cash Flow Equity holders =12300+4600 =16900
Cash Flow from Assets=Cash Flow from operations - Increase in Fixed Assets - Increase in NWC
Increase in NWC =49570-20250-16900 =12420