a. Calculate the operating cash flow for the firm , to creditors and to stockholders. If the net fixed assets increased by $27,000 during the year, what was the change in Net Working Capital NWC? SalesCostsOther expensesDepreciation expenseInterest expenseTaxesDividends2013 New equityNet new long-term debtChange in fixed assets$ 300,000+AtA$ 173,000$ 10,400$ 29,000$ 13,555ta ta ta ta ta$76,000$ 9,000$ 15,700-$ 16,300$ 27,000

Operating Cash Flow (OCF)Formula: OCF=EBIT+Depreciation−Taxes Steps:Earnings Before Interest and…

Sales Costs Other expenses Depreciation expense Interest expense Taxes Dividends 2013 New equity Net new long-term debt Change in fixed assets $ 300,000 +AtA $ 173,000 $ 10,400 $ 29,000 $ 13,555 ta ta ta ta ta $ 76,000 $ 9,000 $ 15,700 - $ 16,300 $ 27,000

Sales Costs Other expenses Depreciation expense Interest expense Taxes Dividends 2013 New equity Net new long-term debt Change in fixed assets $ 300,000 +AtA $ 173,000 $ 10,400 $ 29,000 $ 13,555 ta ta ta ta ta $ 76,000 $ 9,000 $ 15,700 - $ 16,300 $ 27,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

a. Calculate the operating cash flow for the firm , to creditors and to stockholders.
If the net fixed assets increased by $27,000 during the year, what was the change in Net Working Capital NWC?

Sales
Costs
Other expenses
Depreciation expense
Interest expense
Taxes
Dividends
2013 New equity
Net new long-term debt
Change in fixed assets
$ 300,000
+AtA
$ 173,000
$ 10,400
$ 29,000
$ 13,555
ta ta ta ta ta
$
76,000
$ 9,000
$ 15,700
-
$ 16,300
$ 27,000

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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