a.
To compute: The net operating working capital for 2015 and 2016.
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.
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Fundamentals of Financial Management, Concise Edition (MindTap Course List)
- 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 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_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 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_forwardBeta 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_forward
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