Question

Cusic Industries had the following operating results for 2015: sales = $28,260; cost of

goods sold = $19,410; depreciation expense = $4,980; interest expense = $2,340. At

the beginning of the year, net fixed assets were $16,830, current assets were $5,790,

and current liabilities were $3,240. At the end of the year, net fixed assets were $20,310,

current assets were $7,116, and current liabilities were $3,870. The tax rate for 2015

was 30 percent.

a. What was Net Income for 2015?

b. What was the operating cash flow for 2015?

c. What was the cash flow from assets for 2015?

d-1 If no new debt was issued during the year, what was the cash flow to creditors?

d-2 If no new debt was issued during the year, what was the cash flow to stockholders?

e. Assuming that dividends are not distributed, calculate the amount of the total net

new equity raised (if this amount exists).

Answer 1

a.

	2015
Sales	28260
Cost of Goods Sold	19410
Depreciation	4980
EBIT	3870
Interest Expense	2340
EBT	1530
Tax @ 30%	459
Net Income	1071

b.

Operating Cash Flow
EBIT	3870
Depreciation	4980
Tax	-459
Operating Cash flow	8391

c.

Cash Flow from Assets
Operating Cash Flow	8391	8391
Less: Capital Spending	=20310 - 16830 +4980	-8460
Less: Addition to Net Working Capital	=(7116 - 3870) - (5790 - 3240)	-696
Cash Flow from Assets		-765