Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
11th Edition
ISBN: 9780077861759
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Question
Chapter 2, Problem 24QP
Summary Introduction
To determine: The financial statements of cash flows, using the accounting statement of cash flows.
Introduction:
Accounting statements of cash flows indicates how the items in the balance sheet and income statements affect the cash and cash equivalents of the business. This statement is classified into three categories, which are as follows:
- Operating activities,
- Investing activities,
- Financing activities.
Financial cash flow deals with the perspective of finance. The ability to generate cash for the business is determined in the financial cash flow statements.
The financial statement of cash flows is categorized into the following:
- Cash flow from assets;
- Cash flow to creditors;
- Cash flow to stockholder.
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Suppose that a company's cash flow statement showed the following:
o Net Income: $19,917.48
o Depreciation: $3,109.46
o Accounts receivable: $-996.63
o Inventory: $489.61
o Accounts payable: $984.18
What is this company's net cash from operating activities?
$22,519.92
$23,014.49
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$23,504.10
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 $98.1 million in current taxes and had an interest expense of $48.1 million.
Operations
Net income
Depreciation
TIME MANUFACTURING
Statement of Cash Flows
(in millions)
Deferred taxes
Changes in assets and liabilities
Accounts receivable
Inventories
Accounts payable
Accrued expenses
Other
Total cash flow from operations
Investing activities
Acquisition of fixed assets
Sale of fixed assets
Total cash flow from investing activities
Financing activities
Retirement of long-term debt
Proceeds from long-term debt sales
Dividends
Repurchase of stock
Proceeds from new stock issue
Total cash flow from financing activities
Change in cash (on balance sheet)
a. Calculate the operating cash flow.
b. Calculate the net capital spending.
c. Calculate the change in net working capital.
d. Calculate the cash flow to creditors.
e. Calculateβ¦
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 $98.9 million in current taxes and had an interest expense of $48.9 million.
Β Β
Β
TIME MANUFACTURINGStatement of Cash Flows($ in millions)Β
Β Β Operations
Β
Β
Β Β Net income
$
182.0 Β
Β Β Depreciation
Β
94.9 Β
Β Β Deferred taxes
Β
19.9 Β
Β Β Changes in assets and liabilities
Β
Β
Β Β Accounts receivable
βΒ Β
18.9 Β
Β Β Inventories
Β
22.9 Β
Β Β Accounts payable
Β
17.9 Β
Β Β Accrued expenses
βΒ Β
9.9 Β
Β Β Other
Β
3.9 Β
Β
Β
Β
Β Β Total cash flow from operations
$
312.7 Β
Β
Β
Β
Β Β Investing activities
Β
Β
Β Β Acquisition of fixed assets
β$
206.0 Β
Β Β Sale of fixed assets
Β
23.9 Β
Β
Β
Β
Β Β Total cash flow from investing activities
β$
182.1 Β
Β
Β
Β
Β Β Financing activities
Β
Β
Β Β Retirement of long-term debt
β$
171.0Β Β
Β Β Proceeds from long-term debt sales
Β
128.0 Β
Β Β Dividends
βΒ Β
95.0β¦
Chapter 2 Solutions
Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 2 - Prob. 1CQCh. 2 - Prob. 2CQCh. 2 - Prob. 3CQCh. 2 - Prob. 4CQCh. 2 - Prob. 5CQCh. 2 - Cash Flow from Assets Why is it not necessarily...Ch. 2 - Operating Cash flow Why is it not necessarily bad...Ch. 2 - Net Working Capital and Capital Spending Could a...Ch. 2 - Cash Flow to Stockholders and Creditors Could a...Ch. 2 - Prob. 10CQ
Ch. 2 - Building a Balance Sheet Sankey, Inc., has current...Ch. 2 - Building an Income Statement Shellon, Inc., has...Ch. 2 - Market Values and Book Values Klingon Cruisers,...Ch. 2 - Prob. 4QPCh. 2 - Calculating OCF Barrell, Inc., has sales of...Ch. 2 - Calculating Net Capital Spending Gordon Driving...Ch. 2 - Building a Balance Sheet The following table...Ch. 2 - Cash Flow to Creditors The 2014 balance sheet of...Ch. 2 - Cash. Flow to Stockholders The 2014 balance sheet...Ch. 2 - Prob. 10QPCh. 2 - Cash Flows Ritter Corporations accountants...Ch. 2 - Financial Cash flows The Stancil Corporation...Ch. 2 - Building an Income Statement During the year, the...Ch. 2 - Calculating total Cash Flows Schwert Corp. shows...Ch. 2 - Using Income Statements Given the .following...Ch. 2 - Prob. 16QPCh. 2 - Marginal versus Average Tax Rates (Refer to Table...Ch. 2 - Prob. 18QPCh. 2 - Accounting Values versus Cash Flows In Problem 18,...Ch. 2 - Calculating Cash Flows Cusic Industries had the...Ch. 2 - Prob. 21QPCh. 2 - Use the following information for Ingersoll, Inc.,...Ch. 2 - Prob. 23QPCh. 2 - Prob. 24QPCh. 2 - Net Fixed Assets and Depreciation On the balance...Ch. 2 - Prob. 26QPCh. 2 - Prob. 1MCCh. 2 - Prob. 2MCCh. 2 - Prob. 3MC
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