a.
To compute: The net operating working capital for 2015 and 2016.
Balance sheet:
Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.
Income Statement:
A part of the financial statements that lists the income and expenses of business for an accounting year is called income statement. It is prepared at the end of accounting period to know the profitability of the` business.
b.
To compute: The
Free Cash Flow:
The cash generated over and above required by business operations and capital expenditure is called free cash flow. Statement of cash flow reports the cash flow generated or consumed by the business.
c.
To explain: The large increase in dividends in 2016.
Balance sheet:
Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.
Income Statement:
A part of the financial statements that lists the income and expenses of business for an accounting year is called income statement. It is prepared at the end of accounting period to know the profitability of the` business.
Want to see the full answer?
Check out a sample textbook solutionChapter 3 Solutions
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
- Financial information for Powell Panther Corporation is shown below: Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2018 Sales $ 1,625.0 $ 2017 1,300.0 Operating costs excluding depreciation and amortization 1,300.0 1,105.0 EBITDA $ 325.0 $ 195.0 Depreciation and amortization 39.0 31.0 Earnings before interest and taxes (EBIT) $ 286.0 $ 164.0 Interest 36.0 29.0 Earnings before taxes (EBT) $ 250.0 $ 135.0 Taxes (40%) 100.0 54.0 Net income $ 150.0 $ 81.0 Common dividends $ 135.0 $ 65.0 Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2018 Assets Cash and equivalents $ 23.0 $ 2017 18.0 Accounts receivable 164.0 143.0 Inventories 343.0 312.0 Total current assets $ 530.0 $ 473.0 Net plant and equipment 390.0 312.0 Total assets $ 920.0 $ 785.0 Liabilities and Equity…arrow_forwardRemaining Question Completion Status: Calculate operating cash flow for 2016 using the following information? Amount ($) Description Year 2016 500,000 Sales 300,000 Cost of goods sold 65,000 Depreciation Interest expense 15,000 Selling and administrative expenses 55,000 Equity (at the beginning of 2016) 197,250 Tax rate 30% Dividends payout 50% $65,000 $145,500 $125,500 $80,000 QUESTION 6 From the following table calculate net income after tax for 2016? Click Save.and Submit to SGVE and submit. Click Sove All Answers to scve all answersarrow_forwardPart A: Calculating Operating Cash Flows and Net Working Capital 1. Create an Income Statement. Tally Corp has the following information for 2014: Sales - $235,000 Cost - $141,000 Other Expenses - $7,900 Deprecation Expense - $17,300 Interest Expense - $12,900 Taxes - $19,565 Dividends - $12,300 2014 New Equity - $6,100 Net New Long-term Debt - $(4,500) Change in Fixed Assets $25,000 |arrow_forward
- Part A: Calculating Operating Cash Flows and Net Working Capital 1. Create an Income Statement. Tally Corp has the following information for 2014: Sales - $235,000 Cost - $141,000 Other Expenses - $7,900 Depreciation Expense - $17,300 Interest Expense $12,900 Taxes - $19,565 Dividends - $12,300 2014 New Equity - $6,100 Net New Long-term Debt - $(4,500) Change in Fixed Assets - $25,000 2. Answer the following questions: 1. What is the 2014 Operating Cash Flow? 2. What is the 2014 Cash Flow to Creditors? 3. What is the 2014 Cash Flow to Stockholders? 4. If Net Fixed Assets increased by $25,000 during the year what is the addition to NWC?arrow_forwardThe following is the comparative balance sheet of Manish Ltd. Prepare a Cash Flow Statement for the year ended 31 December, 2016 from the details given below: Liabilities Assets 31st Dec., 31st Dec., 2015 31st Dec., 31st Dec., 2015 2016 2016 Share Capital Reserves & Surplus 30,000 755,000 Long-term loans Current Liabilities 740,000 40,000 Fixed assets 760,000 792,500 Depreciation 17,500 727,500 Inventory Accounts 720,000 730,000 715,000 26,000 740,000 735,000 20,000 734,000 Receivable Dividend Provision 25,000 71,05,000 1,59,000 The Income statement for Manish Ltd. for the year ended 31 78,000 1,05,000 1,59,000 Cash 72,500 December 2015 shows the following information: Sales Cost of Sales Tax provisions Dividend provided Amount() 1,45,000 99,000 12,500 8,000arrow_forwardUse the information provided below to prepare the Cash Flow Statement of Rolex Limited for the year ended 31December 2021.INFORMATIONThe following information was extracted from the records of Rolex Limited for the financial year ended 31 December2021.ROLEX LIMITEDSTATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2021RSales 4 140 000Cost of sales (2 020 000)Gross profit 2 120 000Selling and administrative expenses (840 000)Operating profit 1 280 000Interest expense (80 000)Profit before tax 1 200 000Company tax (320 000)Profit after tax 880 000STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER:ASSETS 2021 (R) 2020 (R)Non-current assets 3 740 000 2 940 000Property, plant and equipment 3 440 000 2 940 000Investments 300 000 0 Current assets 1 080 000 900 000Inventories 480 000 500 000Accounts receivable 510 000 320 000Cash and cash equivalents 90 000 80 000Total assets 4 820 000 3 840 000EQUITY AND LIABILITIESEquity 3 120 000 2 600 000Ordinary share capital 2 000 000 2…arrow_forward
- Beta Company current asset and liability balances for the past two years are as follows. December 2016 December 2017 Accounts receivable RM80,000 RM65,000 Inventory RM130,000 RM140,000 Accounts payable RM45,000 RM40,000 Accrued liabilities RM12,000 RM15,000 Net income for the year was RM120,000 and depreciation expense was RM15,000. Prepare operating activities section of cash flow statement.arrow_forwardFree Cash FlowsUsing Rhodes Corporation’s financial statements (shown after part f), answerthe following questions.a. What is the net operating profit after taxes (NOPAT) for 2018?b. What are the amounts of net operating working capital for both years?c. What are the amounts of total net operating capital for both years?d. What is the free cash flow for 2018? e. What is the ROIC for 2018?f. How much of the FCF did Rhodes use for each of the following purposes:after-tax interest, net debt repayments, dividends, net stock repurchases,and net purchases of short-term investments? (Hint: Remember that a netuse can be negative.)arrow_forwardIn its 2017 annual report, Allen Company reports the following (in thousands): 2017 2016 Total revenue $102,500 $99,400 Property, plant, equipment, gross 41,300 38,700 Property, plant, equipment, net 16,540 14,905 Depreciation expense 1,935 1,655 If revenue growth is projected to be 5%, the 2018 forecasted depreciation expense to be added back on the statement of cash flows is: A. $1,935 thousand B. $2,147 thousand C. $1,766 thousand D. $2,065 thousand E. None of the above disregardarrow_forward
- How much is the cash flow from operating activities from the following data of Majan Corporation for the year 2020: RO 000 Proceeds from sale of long-term investment RO 100 Issuance of capital stock RO 65 Depreciation expense RO 15 Operating profit RO 405 Purchase of plant assets RO 65 Decrease in inventories RO 150 Increase in accounts payable RO 150 Increase in accounts receivable RO 225 Retirement of bonds payable RO 75 Payment of cash dividends RO 130 Taxes paid RO 25 Gain on sale of fixed asset RO 40 a. RO 430 b. RO 455 c. RO 325 d. RO 495arrow_forwardCalculate the Cash Flows in the Statement of Cash Flows below from the provided Balance sheet and Income Statement BALANCE SHEET (in millions of dollars) INCOME STATEMENT (in millions of dollars) 2015 2014 2015 2014 Assets Net sales $3,000.0 $2,850.0 Cash and equivalents 10 $ 80 Operating costs except depreciation and amortizatio 2,616.2 2,497.0 90.0 100.0 Accounts receiva ble 375 315 Depreciation and amortization $ 283.8 $ 263.0 Inventories 615 415 Earnings before interest and taxes (EBIT) Total current asse ts $ 1,000 $ 810 Less interest 88.0 60.0 $ 195.8 $ 203.0 Net plant and equipment 1,000 870 Earnings before taxes (EBT) $ 2,000 1,680 Total assets Taxes 78.3 81.2 117.5 $ 121.8 Net income Liabilities and Equity Common dividends 57.5 53.0 Addition to re tained earnings Accounts payable $ $ 60 $ 30 60.0 $ 68.8 Accruals 140 130 Notes payable 110 60 Tax rate 40% 40% 310 $ Total current liabilities 220 Long-term bonds 750 580 $ 1,060 $ Total liabilities 800 Common stock (50,000,000…arrow_forwardUse the information provided below to prepare the Cash Flow Statement of Umhlali Limited for the year ended 31 December 2020.INFORMATIONThe following Information was extracted from the records of Umhlali Limited for the past two years:STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER:2020 (R)2019 (R)Sales1 856 0001 200 000Cost of sales(1 280 000)(750 000)Gross profit576 000450 000Operating expenses(291 200)(212 000)Depreciation30 00026 000Other operating expenses261 200186 000Operating profit284 800238 000Interest on mortgage loan(24 000)(72 000)Profit before tax260 800166 000Company tax(90 240)(58 100)Profit after tax170 560107 900vmcInformation extracted from the Statement of Financial Position for the past two years:STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER:2020 (R)2019 (R)ASSETSNon-current assets2 464 1602 444 000Fixed assets2 464 1602 444 000Current assets356 000336 000Inventories (all Trading inventory)120 000250 000Accounts receivable40 00064 000Cash &…arrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningFundamentals Of Financial Management, Concise Edi...FinanceISBN:9781337902571Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning