(a)
To compute: Owner’s equity for 2018 and 2019.
Introduction: The
(b)
To compute: Change in net working capital for 2019.
Introduction: The balance sheet is one of the three financial statements that every organization prepares periodically. It helps the users of the financial statements in analyzing the financial position of the organization.
(c)
To compute: Cash flow from assets in 2019.
Introduction: The balance sheet is one of the three financial statements that every organization prepares periodically. It helps the users of the financial statements in analyzing the financial position of the organization.
(d)
To compute: Cash flow to creditors.
Introduction: The balance sheet is one of the three financial statements that every organization prepares periodically. It helps the users of the financial statements in analyzing the financial position of the organization.
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Corporate Finance
- LONG-TERM FINANCING NEEDED At year-end 2019, total assets for Arrington Inc. were 1.8 million and accounts payable were 450,000. Sales, which in 2019 were 3.0 million, are expected to increase by 25% in 2020. Total assets and accounts payable are proportional to sales, and that relationship will be maintained; that is, they will grow at the same rate as sales. Arrington typically uses no current liabilities other than accounts payable. Common stock amounted to 500,000 in 2019, and retained earnings were 475,000. Arrington plans to sell new common stock in the amount of 130,000. The firms profit margin on sates is 5%; 35% of earnings will be retained. a. What were Arringtons total liabilities in 2019? b. How much new long-term debt financing will be needed in 2020? (Hint: AFN - New stock = New long-term debt.)arrow_forwardThe Malia Corporation had sales in 2019 of $65 million, total assets of $42 million, and total liabilities of $20 million. The interest rate on the company’s debt is 6 percent and its tax rate is 21 percent. The operating profit margin was 12 percent. What were the company’s operating profits and net income? What was the operating return on assets and return on equity? Assume that interest must be paid on all of the debt.arrow_forwardILoveFinance, Inc., provided the following financial information for the quarter ending September 30, 2019: Net income $141,463 Depreciation and amortization $33,414 Increase in receivables $12,709 Increase in accounts payables $2,411 Decrease in marketable securities $1,225 Increase in inventory $1,336 What is the cash flow from operating activities generated during this quarter by the firm? O $163,243 O $98,756 O-$164,468 O-$98,756arrow_forward
- BT21 Inc. has recorded the following transactions on its book for the year 2021. How much total Cash Inflow from financing activities that BT21 should reflected on its Statement of Cash Flow:i. Payment for interest of the issued bonds on April 1, 2021, 900.ii. Cash dividend received on the short-term investment, 5,000iii. Depreciation on plant that manufactures goods for sale, 6,000.iv. Payment of income tax on gain on sale of treasury bills, 2,000.v. Issued 500 ordinary shares for 50,000.vi. Received cash from interest on the acquired treasury bonds of BigHit Corp, 2,400.vii. Payment for marketable securities, 12,000.arrow_forwardAssume the company generated $3,400 in net operating profits after taxes. Using the information below, calculate the free cash flow for 2020. Balance Sheet as of December 31 (Millions of Dollars) 2020 2019 2020 2019 Assets Liabilities and Equity $900 Accounts payable Cash $1,026 $1,634 $1,436 Short-term Investments 90 100 Accruals 550 500 Accounts Receivable 1,968 1,726 Notes 645 575 payable Inventories 4,971 4,367 Total Current 2,829 2,511 Liabilities Total Current 8,055 7,093 Assets Long-term 2,173 2,815 debt Net plant and equipment १.943 8,733 Total Liabilities 5,002 5,326 Common Total Assets $17,998 $15.826 2.400 2,500 stock Retained earnings 10,595 8,000 Total common 12.995 10,500 equity Total liabilitics and $17.998 $15,826 cquity O $1.423 $1.739 O $1.467 O $1,534arrow_forwardFor 2019, Nirvana Industries disclosed cash revenue of $12.0 million and cash expenses of $6.0 million, depreciation on plant and equipment of $2.0million and an effective tax rate of 21%. For 2019, Nirvana Industries had capital expenditures of $1.0 million to purchase manufacturing equipment and invested $850,000 in net working capital. What were the net (total) cash flows for Nirvana Industries in 2019? Round your answer to the nearest hundredth of million $arrow_forward
- During 2019, Raines Umbrella Corp. had sales of $740,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $550,000, $90,000, and $95,000, respectively. In addition, the company had an interest expense of $94,000 and a tax rate of 21 percent. (Assume that interest is fully deductible). What is operating cash flow from the firm (OCF)? Please show inputs of numbers, answer and Formulaarrow_forwardBTS Inc. has recorded the following transactions on its book for the year 2021. How much total Cash Inflow from financing activities that BTS should reflected on its Statement of Cash Flow:i. Payment for interest of the issued bonds on April 1, 2021, 900.ii. Cash dividend received on the short-term investment, 5,000iii. Depreciation on plant that manufactures goods for sale, 6,000.iv. Payment of income tax on gain on sale of treasury bills, 2,000.v. Issued 500 ordinary shares for 50,000.vi. Received cash from interest on the acquired treasury bonds of BigHit Corp, 2,400.vii. Payment for marketable securities, 12,000arrow_forwardUse the income statement shown next to calculate free cash flow for Rainier Printing for 2021. In addition to the information in the income statement, assume that Rainier had $580,000 in capital expenditures and $380,000 in working capital investments during 2021. Rainier Printing Income Statement January 1 to December 31, 2021 ($ thousands) Net sales $ 8,600 Cost of sales 5,800 Gross profit 2,800 Operating expense 1,080 Depreciation expense 530 Operating income 1,190 Interest expense 230 Income before tax 960 Tax 192 Income after tax $ 768 Note: Enter your answer in thousands.arrow_forward
- For questions 21-22, refer to the Income Statement below. What is the operating cash flow for 2020? ABC Corporation 2020 Income Statement ($ in millions) Net Sales 26,500 Cost of Goods Sold 17,448 Depreciation 1,289 Earnings before interest and taxes 7,763 Interest paid 2,548 Taxable Income 5,215 Less Taxes 650 Net Income 4,565arrow_forwardThe King Mattress Company had the following operating results for 2018-2019. In addition, the company paid dividends in both 2018 and 2019 of $67,200 per year and made capital expenditures in both years of $30,000 per year. The company's stock price in 2018 was $8 and $7 in 2019. The industry average earnings multiple for the mattress industry was 9 in 2019 and the free cash flow and sales multiples were 18 and 1.5, respectively. The company is publicly owned and has 1,600,000 shares of outstanding stock at the end of 2019. Balance Sheet, Dec 31, 2019 2018 Cash $ 364,000 $ 124,000 Accounts Receivable $ 374,000 $ 424,000 Inventory $ 274,000 $ 324,000 Total Current Assets $ 1,012,000 $ 872,000 Long-lived Assets 1,320,000 1,340,000 Total Assets $ 2,332,000 $ 2,212,000 Current Liabilities $ 224,000 $ 324,000 Long-term Debt 624,000 524,000 Shareholder Equity 1,484,000 1,364,000 Total Debt and Equity $ 2,332,000 $…arrow_forwardPaladin Furnishings generated $2 million in sales during 2019, and its year-end total assets were $1.4 million. Also, at year-end 2019, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable, and $100,000 of accrued liabilities. Looking ahead to 2020, the company estimates that its assets must increase by $0.70 for every $1.00 increase in sales. Paladin's profit margin is 5%, and its retention ratio is 35%. How large of a sales increase can the company achieve without having to raise funds externally? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Do not round intermediate calculations. Round your answer to the nearest cent.arrow_forward
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