a.
To determine: The net operating working capital for 2018 and 2019.
Statement of Cash Flow: It is a part of financial statements that are included in the annual report of a company. It reports the cash generated or used by the business in a specified period.
Cash Flow from Operating Activities: The cash generated over and above required business operations is called and reported as cash flow from operating activities. Statement of cash flow reports the net cash flow generated or consumed by the business.
a.
Answer to Problem 14P
The net operating working capital for 2018 is $42,000 and 2019 is $50,220.
Explanation of Solution
Determine the net operating working capital for 2018:
Therefore the net operating working capital for 2018 is $42,000.
Determine the net operating working capital for 2019:
Therefore the net operating working capital for 2019 is $50,220.
b.
To determine: The
b.
Answer to Problem 14P
The free cash flow in 2019 for Company A is $22,780.
Explanation of Solution
Determine the free cash flow in 2019 for Company A:
Therefore, the free cash flow in 2019 for Company A is $22,780.
c.
To determine: The statement of
c.
Explanation of Solution
The statement of stockholders equity for Company as on 2019 is as follows:
Excel Spreadsheet:
Excel Spreadsheet Workings:
d.
To determine: The EVA of Company A for 2019.
d.
Answer to Problem 14P
The EVA of Company A for 2019 is $21,678.
Explanation of Solution
Determine the EVA of Company A for 2019:
Therefore, the EVA of Company A for 2019 is $21,678.
e.
To determine: The MVA of Company A for 2019.
e.
Answer to Problem 14P
The MVA of Company A for 2019 is $13,780.
Explanation of Solution
Determine the MVA of Company A for 2019:
Therefore, the MVA of Company A for 2019 is $13,780.
Want to see more full solutions like this?
Chapter 3 Solutions
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
- AFN EQUATION Refer to Problem 16-1 and assume that the company had 3 million in assets at the end of 2019. However, now assume that the company pays no dividends. Under these assumptions, what additional funds would be needed for the coming year? Why is this AFN different from the one you found in Problem 16-1?arrow_forwardUse the information provided below to prepare the Cash Flow Statement of Harmony Limited for the year ended 31 December 2020. INFORMATIONThe information provided below was extracted from the accounting records of Harmony Limited on 31 December 2020: (Harmony Limited Information 2) Extract of Statement of Changes in Equity for the year ended 31 December 2020 Retained earnings R Balance on 01 January 2020 1 500 000 Profit after tax 480 000 Dividends paid and proposed in 2020 (180 000) Balance on 31 December 2020 1 800 000 Note:(a) Plant and equipment was purchased but there was no disposal. (b) The number of ordinary shares in issue was 930 000. (c) All purchases and sales of inventory were on credit. (d) Credit terms to debtors are 30 days. Debtors took approximately 28 days to settle their accounts during 2019.arrow_forward(b) Calculate the following for 2019: i. Operating Cash Flow ii. Net Capital Spending iii. Change in Net Working Capital iv. Cash Flow from Assets v. Cash Flow to Creditors vi. Cash Flow to Stockholders ONLY PARTS iv, v, vi to be done please.arrow_forward
- 10. Creditors' Cash Flows. On the statement of financial position on December 31, 2018, non-current liabilities were $1,350,000, and on the statement of financial position on December 31, 2019, non-current liabilities were $1,470,000. In the 2019 statement of comprehensive income, interest expense was $97,500. What is the creditor's cash flow in 2019? 11. Cash flow to shareholders. In the statement of financial position on December 31, 2018, common stock capital was $120,000 and capital surplus was $2,289,000. On the December 31, 2019 statement of financial position, the respective items were $137,000 and $2,568,000. If a cash dividend of $149,500 was paid in 2019, what was the shareholder's cash flow for that year?arrow_forwardSuppose you collected the following information of ABC corp. from the financial statements published in 2019. Entry Total Current Assets 14050001206000 Current Liabilities Notes Payable Earning before Interest and Taxes Depreciation Capital expenditures Tax rate Select one: @a. 1279990X b. 187578 0c Estimate the Free Cash Flow available for ABC corp. at the end of 2019. 60030 2019 d. 1092412 e 30 2018 602000 571500 476990 457912 97680 159000 -30000 40%arrow_forwardSome selected financial statement items belonging to PXR Company are given in the table below. According to this information, which of the following is Return on Assets (ROA) in 2021? Receivables 18,500 Total Assets in 2021 130,000 Current Liabilities 42,000 Total Assets in 2020 110,000 Profit before Tax 18,000 Tax 3,000 Select one: a. 0.125 b. 0.150 c. 0.205 d. 0.137arrow_forward
- As part of your analysis, you are required to investigate Insignia Corporation Limited’s cash flows. Required: Using the financial statement provided: Calculate the following for 2020: Cash Flow from Assets Cash Flow to Creditors Cash Flow to Stockholdersarrow_forwardHow to prepare a statement of cash flow for this question?arrow_forwardPlease answer in good accounting form thankyou 14. What is the net cash provided by operating activities?arrow_forward
- hat is the amount of Target’s total liabilities at the end of FY2023 and FY 2022 (Hint: use the Statement of FinancialPosition)?b. What percentage of Target's assets was being financed withliabilities at the end of FY 2023 and FY 2022 versus thepercentage of assets financed with shareholders' equity (Hint:use the Statement of Financial Position)?c. Comment on the change in total liabilities in $ amounts and asa percentage of total assets between 2022 and 2023. Is this apositive or negative and why?d. What is the amount of debt and interest rate for Target’slongest term debt Due 2049-2053 as of the end of FY 2023(Hint: use the chart in the Long Term Debt footnote 16)?e. Target reported Accrued and Other Current Liabilities of $6,090 as of the end of FY 2023. What was the largestarrow_forwarda) Calculate the cash operating cycle of Stone Limited for the year ended 30 April, 2018 and 2019. b) Based on the result of the previous year end and the industry average. Draft a report addressed to the Board of Directors of Stone Limited analysing theperformance of the company for the year 2019arrow_forwardUse the information provided (first picture) to calculate the return on assets and return on equity ratios for 2021 and put your answer in the template provided (second picture)arrow_forward
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
Fundamentals Of Financial Management, Concise Edi...FinanceISBN:9781337902571Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning